California Employment News: Recent Episodes
California Employment News
In this episode of California Employment News, Weintraub Tobin shareholder Meagan Bainbridge and associate Nikki Mahmoudi discuss the key provisions every legally compliant handbook should address.
In this episode, they cover:
- Foundational provisions, including at-will employment and handbook disclaimers
- Harassment, discrimination, retaliation, and accommodation policiesWage and hour requirements, leave rights, and workplace expectations
- Employee acknowledgements and the importance of annual handbook reviews
Listen for a practical overview of how an updated handbook can help California employers promote consistency,
State law requires that employers take steps to prevent and correct wrongful behaviors in the workplace, such as discrimination, harassment, and retaliation. Lizbeth (Beth) West explains what employers should know about mandatory harassment prevention training for non-supervisors and supervisors on this installment of California Employment News.
Watch this episode on the Weintraub YouTube channel here.
Wage and hour compliance remains a major source of risk for California employers. In this episode of California Employment News, Weintraub Tobin Associate Nikki Mahmoudi and Shareholder Ryan Abernethy discuss common issues involving meal and rest breaks, rounding, regular rate calculations, and employee attestations.
Listen for a clear breakdown of common wage and hour mistakes California employers should review to help reduce compliance risk.
When an employee leaves, employers should act quickly to protect trade secrets, confidential business information, and customer relationships. In this 100th episode of California Employment News, Weintraub Tobin attorneys James Kachmar and John Slavik discuss practical steps companies can take before, during, and after an employee’s departure.
Listen for a breakdown of how California employers can better protect valuable business information when an employee exits the company.
Watch this episode on the Weintraub YouTube channel or listen to this podcast episode here.
Meal and rest break compliance remains a key issue in California wage and hour litigation. In this episode of California Employment News, Weintraub Tobin Shareholders Meagan Bainbridge and Shauna Correia discuss how employers can use attestations to identify issues, correct them, and reduce legal exposure.
Listen for a breakdown at how California employers can use attestations as part of a stronger meal and rest break compliance strategy.
Watch this episode on the Weintraub YouTube channel or listen to this podcast episode here.
Thinking about using a PEO or staffing agency? In this episode of California Employment News, Weintraub Tobin attorneys Lizbeth (Beth) V. West and Talia Delanoy discuss the risks and benefits employers should consider before entering into these relationships, including joint employer liability and key contract provisions.
ICE has updated its audit guidelines, and the stakes for I-9 compliance just increased. In this episode of California Employment News, Weintraub Tobin attorneys Shauna Correia and Meagan Bainbridge discuss how recent ICE changes are reclassifying common I-9 errors and what that means for employers facing potential audits.
Terminating an employee can present significant legal risk if not handled carefully. In this episode of California Employment News, Weintraub Tobin attorneys Nikki Mahmoudi and John Slavik discuss best practices and key considerations employers should evaluate before making a termination decision.
Listen for a breakdown of what California employers need to know to approach employee terminations thoughtfully and stay compliant
When an employment relationship ends, California employers have specific legal obligations they must meet. In this episode of California Employment News, Weintraub Tobin associates Nikki Mahmoudi and Chris Horsley provide a practical refresher on final pay requirements and the key notices employers should be prepared to deliver.
Listen for guidance on what California employers need to know to stay compliant when navigating employee separations.
Artificial intelligence is increasingly being used in hiring, performance management, and workplace decision making. In this episode of California Employment News, Weintraub Tobin Shareholder Meagan D. Bainbridge and Senior Attorney Jackie Simonovich discuss practical steps employers should take when implementing AI and how to conduct meaningful bias audits.In this episode they cover:
- How to create internal AI policies that address approved tools, data privacy, and reporting concerns
- Steps employers can take to safeguard employee data and protect privileged information
- What an AI bias audit is and why it matters for compliance
- How to evaluate AI tools for discriminatory impact and document findings defensively
Listen for a clear breakdown of what California employers need to know to reduce risk while using AI in the workplace.
AI is showing up in hiring, recruiting, performance management, and employee monitoring. While these tools promise efficiency, they can also create significant legal risk if they result in discriminatory outcomes. In this episode of California Employment News, Weintraub Tobin attorneys Jackie Simonovich and Lukas Clary discuss how employer use of AI can implicate Title VII, the ADA, and FEHA, and review key new California AI laws and deadlines.
In this episode, they cover:
- How AI tools can create disparate impact based on race, gender, age, or disability
- Why employers remain responsible for third party AI vendors
- New FEHA regulations effective October 1, 2025 governing automated decision systems
- New California AI laws, including AB 2013, SB 53, and SB 942/AB 853
Listen for a clear breakdown of what California employers need to know to stay compliant as AI regulation continues to evolve.
New guidance from the U.S. Department of Labor is changing how employers should track FMLA leave tied to medical appointments. In this episode of California Employment News, Weintraub Tobin partners Lizbeth (Beth) V. West and Meagan Bainbridge break down the DOL’s recent opinion letter and provide a practical refresher on how to properly calculate and track FMLA leave in a variety of scenarios.
In this episode of California Employment News, Weintraub Tobin attorneys Lizbeth (Beth) V. West and Meagan Bainbridge discuss:
Watch this episode on the Weintraub YouTube channel.
In this episode of California Employment News, we break down AB 692, a law that places significant limits on so called “stay or pay” provisions in contracts between employers and workers in California. Weintraub Tobin attorneys Shauna Correia, Chair of the Firm’s Labor and Employment group, and associate, John Slavik, cover:
Watch this episode on the Weintraub YouTube channel.
In this episode of California Employment News, Weintraub Tobin attorneys Chris Horsley and Ryan Abernethy break down employer obligations related to 401(k) retirement plans, CalSavers, and health benefits.
Watch this episode on the Weintraub YouTube channel.
Another update for California employers is on the horizon. In this episode of California Employment News, Weintraub Tobin attorneys Meagan Bainbridge and Nikki Mahmoudi break down SB 513, a new law that clarifies what documents must be included in an employee’s personnel file which came into effect on January 1, 2026.
Watch this episode on the Weintraub YouTube channel.
With the holiday season upon us, there are some important tips for employers to keep in mind for holiday gatherings and celebrations. Meagan Bainbridge and Nikki Mahmoudi discuss these best practices in this special edition of California Employment News.
Watch this episode on the Weintraub YouTube here.
In this episode, Weintraub Tobin attorneys Jackie Simonovich and Chris Horsley break down California’s expanded recall and reinstatement protections under AB 858, which are now in effect. The law requires hospitality, service, and travel industry employers to offer open positions to qualified laid-off employees and prohibits retaliation.
Watch this episode on the Weintraub YouTube channel.
Senate Bills 642 and 464 are set to take effect at the start of the new year, bringing important changes to the California workplace. Weintraub employment attorneys Lizbeth “Beth” West and Lukas Clary break down these new laws and what employers need to know on this episode of California Employment News.
Watch this episode on the Weintraub YouTube channel.
The Workplace Know Your Rights Act – SB 294, takes effect on January 1st, 2026 and provides requirements for employers to notify employees of their rights related to law enforcement interactions at work, as well as providing the option for employers to notify an emergency contact in the event of an employee’s arrest at the workplace. Weintraub Tobin attorneys Ryan Abernethy and John Slavik discuss the key provisions of the new law, including the penalties for violations.
Watch this episode on YouTube.
In this episode of California Employment News, Weintraub Tobin attorneys Shauna Correia and Meagan Bainbridge discuss SB 261, a new law that strengthens enforcement of California wage judgments. Learn about the new public database for unpaid judgments, triple penalties for late payment, and mandatory attorney’s fees for enforcement.
Watch this episode on the Weintraub YouTube channel.
Show Notes:
Shauna: Thank you for joining us for this installment of the California Employment News, an informative video and podcast resource offered by the Labor and Employment group at Weintraub Tobin. My name is Shauna Correia. I’m the practice group leader, and I’m joined today with my partner, Meagan Bainbridge. Today we’ll be talking about Labor Code enforcement tools that were recently greenlighted by Governor Newsom. Meagan, can you start us off by providing some background on this new law?
Meagan: Yeah. So, for context, if a judgment is issued against a defendant employer for a wage claim filed by an employee before the Labor Commissioner, under the current Labor Code, what have the proceedings under the Labor Code and Civil Code allowed for simple interest to accrue on a judgment until that judgment is paid. However, the legislature believed that this was not a strong enough incentive to promptly pay judgments owed or to deter employers from violating the Labor Code in the first place. So, Shauna, do you want to kind of talk through what the new regulations allow for and what those tools being provided are?
Shauna: So the stated intent behind SB261 is to provide these additional tools to enhance enforcement and collection of wage judgments in order to ensure victims of wage theft are paid in a timely manner. And so the new law, as enacted, requires the creation of a public database of employers who have unsatisfied wage judgments against them. And that would be searchable online in order to increase accountability. Megan, this new law will also provide some new penalties to incentivize prompt payment of judgments, right? Yeah.
Meagan: So, a new labor code section, section 238.05, is being added that allows for a civil penalty of up to three times the judgment, plus accrued post-judgment interest for non-payment of any judgment that remains outstanding for more than 180 days after the deadline to appeal has passed. 50% of this penalty will go to the employee. The other 50% will go to the Division of Labor Standards Enforcement. And the new law also makes mandatory an award of attorney’s fees and cost to the employee or the public prosecutor, whoever has to enforce the judgment. Well, those are some powerful enforcement incentives.
Now, there is a way for employers to avoid these penalties even if they were delinquent in paying a judgment, which is that if they work with the employee and they reach an accord as outlined in Labor Code Section 238 prior to the deadline, and they comply with the terms of the agreement, such as if it calls for installment payments, then that the penalty would not be imposed. Thanks, Shauna. And that’s it for now. You can continue to find our video series and podcast through the lelawblog.com on the Weintraub Tobin YouTube channel or wherever you listen to your favorite podcasts. Thank you everyone for joining us and we look forward to reconnecting on the next edition of California Employment News.
Shauna: We’ll see you then. Thanks.
California’s new AI regulations will take effect on October 1, 2025, impacting how employers can use automated tools in hiring, recruitment, and beyond. In this episode of California Employment News, Weintraub attorneys Meagan Bainbridge and Shauna Correia break down what the rules mean, the risks of noncompliance, and the steps employers can take to stay compliant.
Watch this episode on the Weintraub YouTube channel.
Another year, another minimum wage raise. In this episode of California Employment News, Weintraub attorneys Chris Horsley and Nikki Mahmoudi expand on updates to state and local wage increases and cover key cities like Santa Monica, City and County of Los Angeles.Watch this episode on YouTube. Other Relevant Videos:* CA Local Minimum Wage Updates * California Wage Compliance – Avoiding Legal Pitfalls * California’s New Healthcare Minimum Wage
In this episode of California Employment News, Weintraub attorneys Ryan Abernethy and Talia Delanoy revisit the complexities of the regular rate of pay—a frequent issue in wage and hour class actions. From bonuses and shift differentials to common employer mistakes, they break down what must (and must not) be included in calculations, and the costly risks of getting it wrong.
Watch this episode on the Weintraub YouTube channel.
Show Notes:
Ryan: Hello, everyone, and thank you for joining us for this installment of California Employment News, an informative video and podcast resource offered by the Labor and Employment Group here at Weintraub Tobin. My name is Ryan Abernethy, and I’m a shareholder in the firm’s Labor and Employment Group. I’m joined today by my partner, Talia Delanoy, who is new to our group, and this is her inaugural episode.
We’re happy to have her join our team here. Over three years ago now, Lukas Clary and I spoke with you about the regular rate of pay. But since the regular rate of pay is such a prevalent issue that is increasingly featured in Wage and Hour class actions that we’re seeing pouring in. We wanted to revisit that topic today.
Talia, why don’t you start us off by giving us a refresher with some basic information about the regular rate of pay, what it is exactly, and what needs to be included within it.
Talia: Yes, absolutely. Thank you, Ryan. Most employers assume that the base rate of pay and employees regular hourly rate is all they need to think about when they calculate overtime and double-time. They just take the base rate of pay, multiply it by one and a half for overtime or two for double time, and that’s it. Unfortunately, the calculation isn’t that simple. The regular rate of pay, which is different from the base rate of pay, actually includes additional income such as non-discretionary bonuses, shift differentials, which is like additional pay when you have an employee use an undesirable schedule or for a weekend or overnight work, piece rate compensation, such as payment per box of fruit picked, or even commissions. Employers need to add to have all of these types of income in addition to the employee’s base hourly rate before calculating both overtime, double time, sick pay, and meal and rest period premium payments. To make this even more complicated, the law requires one calculation for a flat sum bonus, such as $50 paid for weekend work, and another calculation for production bonuses, such as an employee who might earn 5% of all sales in a given month.
Talia: Let’s Let me give you a quick example. If you’re paying an employee a flat-sum bonus, here’s the example. Your employee earns $16 per hour and works 40 straight-time hours and four overtime hours on Saturday. The straight The overtime payment is simple. $16 times 40 hours equals $640. The overtime payment, $24 an hour times 4 hours equals $96. Now, the employee has paid the $50 bonus for working on Saturday. Now you need to calculate the overtime compensation due on the bonus. Now this is where the math comes in. You take $50 in bonus, you divide it by the 40 hours of straight time hours worked, and this gets you $1. 25, which is the per hour value of the bonus. Now you take that $1. 25, you multiply it by 1. 5 for the overtime, and you get $1 87. 5. This is the bonus overtime value per hour. Now you have to actually figure out how much of that goes to the overtime. You take the $1. 87. 5 times the 4 hours of overtime the employee worked, and you get $7. 50. This is the overtime due on the bonus. This is the part that most employers miss.
Talia: When you add all of that up, the total straight time pay, the total overtime pay, the $50 flat sum bonus, and that $7. 50 over time owed on the bonus, you get a total of $793. 50.
Ryan: Well, thank you, Talia. How about some good news now that we realize that a lot of us out there might be underpaying our employees based on the regular rate? Let’s discuss what doesn’t need to be included in the regular rate. There are at least three categories of items that can be excluded from the regular rate calculation because they’re not considered wages. The first exclusion is for payments that could be categorized as gifts or gratuities. This would include employer contributions to retirement life or other insurance benefits. Benefits. It also includes holiday bonuses or other payments given to employees that are considered rewards for service or rewards for loyalty, so long as the amounts paid are not directly measured by the employee’s hours worked or the employee’s production or efficiency. The second category of item that can be excluded from the regular rate includes items and payments that are made for periods where no work is performed. This is stuff like vacation pay, paid sick sick pay or similar payments. The third category is expense reimbursements, which are obviously not considered wages. Now, this shouldn’t be confused with per diem payments, which usually are required to be included in the regular rate of pay calculations.
In addition, the cost or the value of loggings or meals that the company provides to employees often must be included as well in the regular rate of pay under certain circumstances. It’s pretty detailed, so we won’t get into that today, but just be aware of that. It’s also important to remember that premium payments must be paid at the regular rate of pay, not the base hourly rate. Just a refresher, under California law, not exempt employees who are not providing compliant meal or rest breaks are entitled to an extra hour of pay under the labor code. This payment is called a premium. We discuss this premium in more detail in other episodes. But many employers pay these premiums out at the employer’s base hourly rate, and that’s a mistake because the California Supreme Court has clarified that premiums must actually be paid at the often higher regular rate of pay. That would be a violation just by getting that wrong. Sick leave must also be paid out the regular rate of pay and not the base hourly rate. Talia, why don’t you share with us some of the risks employers face for getting the regular rate wrong?
Talia: Absolutely, yeah. Unfortunately, regular rate of pay violations are low hanging fruit. An attorney need only request the employee’s payroll records, which the employers are obligated to provide, and they do some simple math to see if there are violations. If an employee’s pay stub shows an overtime rate that is exactly one and a half times the base rate of pay in the same pay period that the employee earned a bonus or other income like we discussed earlier, then that lawyer knows they have a slam dunk case. In the example that I gave earlier, if an employer neglected If you wanted to include that Saturday work bonus in the overtime calculation, that $7. 50 omission could cost the employer thousands of dollars. This is made up of significant penalties, $100 per employee per pay pay period and up to 30 days of pay at the employee’s full daily rate if the error is discovered after the employee quits or is terminated. The damages also include interest, potential liquidated damages, and payment of the employee’s attorney’s fees. This is a huge sum of money for missing a payment of just $7. 50. Employers, unfortunately, can also be subject to class action liability if they fail to use the regular rate of pay for all of their employees.
Talia: In this very scary turn, those damages can extend back four years from when an employee files a lawsuit.
Ryan: Thank you, Talia. We know this is a scary topic for some, and it’s pretty complicated. You can always reach out to one of our attorneys here at Weintraub if you have any specific questions about the regular rate or how to calculate production bonuses. With that, that’ll do it for today. We thank you all for joining us. You can continue to find California Employment News at our blog at www.thelelawblog.com and wherever you listen to your favorite podcasts. With that, we’ll see you next time. Thank you for joining us.
Talia: Thank you.
Whether setting pay for a new hire or adjusting compensation for a current employee, employers must navigate a range of legal considerations. In this episode of California Employment News, Weintraub employment attorneys Meagan Bainbridge and Nikki Mahmoudi share key reminders to help employers stay compliant with California’s complex wage and hour laws.
Watch this episode on the Weintraub YouTube channel.
Show Notes:
Meagan:Hello, everyone. Thank you for joining us for this installment of the California Employment News, an informative video and podcast resource offered by the Labor and Employment Group at Weintraub To. My name is Meagan Bainbridge, and I’m a shareholder in the Firm’s group. Today, I’m joined by my colleague, Nikki Mahmoudi, and we’re talking about what are important considerations for employers when deciding what to pay an employee.
In California, deciding an employee’s pay requires careful consideration of various factors, including the legal requirements and, of course, business needs and best practices. First, employer should determine their business needs and decide who it is that they need to hire and come up with a job description consistent with those needs. Employer should then review the job description developed for the position and correctly classify the employee as exempt or non-exempt. If you’re not sure what that is, in our archives, there’s many podcasts and video resources talking about what the difference is between an exempt and a non-exempt employee is. If it is an exempt position, employer should then ensure that the position meets the exempt salary requirements. If non-exempt, then employer should require, at a minimum, that that position meets the state’s minimum wage requirements.
Nikki:Once the pay is determined, employer should ensure that they are complying with California’s Pay Transparency Laws, which, among other things, requires the following: Pay Scale Disclosures and job postings. As of January first, 2023, employers with 15 or more employees must include the pay scale, which includes either a salary or an hourly wage range. In all job postings, including remote positions that could be filled with California residents. This information must be included in the job posting itself. You can’t just include a link or a QR code that will take them to another page. You must also to provide a pay scale to current employees. Employers are required to provide current employees with a pay scale for any position upon request. Finally, there’s a prohibition against salary history inquiries. It’s illegal to ask a job applicant about their salary history in determining whether to make an offer to an applicant and what that offer is. Employers may inquire as to a particular applicant’s salary expectations. It just can’t be linked with the previous pay. Nikki, what else should employers consider when setting an employee’s pay?
Meagan:Let’s talk a little bit about fair pay. Under Labor Code Section 1197. 5, which can apply to public and private employers, an employer will not pay any of its employees at wage rates less than the rates paid to employees of the opposite sex, another race, or ethnicity for substantially similar work when viewed as a composite of skill, effort, and responsibility and performed under similar working conditions. Except where the employer demonstrates the wage differential is based upon one or more of the following factors which we’re going to talk about, which must be applied reasonably. Different factors that we’re going to discuss must account for the entire wage differential. Those include a seniority system, a merit system, a system that measures earnings by quantity or quality of production, a bonafide factor other than sex, race, or ethnicity, such as education, training, or experience. Now, this bonafide factor only applies if the employer demonstrates that it’s not based on or derived from a sex, race, or ethnicity-based differential in compensation, is job-related with respect to the position in question, and is consistent with a business necessity. When we’re talking about business necessities, it’s defined as an overriding legitimate business purpose such that the factor applied upon effectively fulfills the business purpose it is supposed to serve.
Nikki:Now, the bonafide defense does not apply if the employee demonstrates that an alternative business practice exists that would serve the same business purpose without producing the wage differential. A few things to keep in mind. An employee’s prior salary cannot justify a disparity in compensation. That doesn’t mean an employer cannot make a compensation decision based on a current employee’s salary. It just means that an employee can do so, so long as any wage differential resulting from that compensation decision is justified by one or more of the factors we discussed. Now, keep in mind with Labor Code Section 1197. 5, it requires employers to maintain records of wages and wage rates, job classifications, and other terms of conditions of employment for a period of three years. Typically, though, our recommendation is to maintain records for at least four years to comply with other labor code obligations. Also, employers cannot discharge or in any manner discriminate or retaliate against an employee by reason any action they take to invoke or assist in any manner the enforcement of labor code Section 1197. 5. Employers also cannot prohibit employee from disclosing their own wages, discussing the wages of others, inquiring about another employee’s wages or aiding or encouraging other employees to exercise their rights under that labor code section.
At the same time, there’s no obligation that employees have to disclose their wages. So as an employer, you want to make sure you have policies in place enforcing this, and you also want to make sure that managers and supervisors are properly trained. Megan, is there anything else employers should keep in mind?
Meagan:Yeah, similar to what you were just saying, just a couple expansions on that. First, I just want to remind everyone that the Fair Employment and Housing Act, FHA, does prohibit discrimination of applicants and employees based on employers with five or more employees, at least, based on any protected category. That would include race, religion, gender, that thing. This includes paying employees differently based on a protected category. So unlike the Fair Pay Act, FHA requires the employee to prove a discriminatory intent. That said, it’s important to be able to substantiate any differences in pay for an employee performing the same job as another employee. If you don’t have one, the assumption will be that it was done for a discriminatory reason. Second, similar to what you just said under the Fair Pay Act, Nikki, employers cannot limit employees’ discussion their wages and workplace environment with other employees. California law, as well as the National Labor Relations Act, the NLRA, protects employees and allows them to discuss their wages and their working conditions with other employees. So policies that require employees to keep their wages confidential are unenforceable and likely in violation of several laws on their face.
Nikki, any last thoughts for employers who are studying their employees’ pay?
Nikki:Yeah, a few more things. It’s always good to perform a pay audit every so often to identify any potentially material and/or sex, race, or ethnicity-based pay differences within the workforce. Employers will want to make sure to review the type of work performed rather than just the specific job title. Also, employers will want to make sure to have policies in place prohibiting any pay discrimination. For those individuals involved in the making of compensation decisions, you’ll want to provide training to make sure your employees understand what factors are permissible in setting wages and salaries.
Meagan:Thanks, Nikki. That’s it for now. You can continue to find our video series and podcast through theleblog. Com or on Weintraub Tobin’s YouTube channel or on your favorite podcast channel. Thank you everyone for joining us, and we look forward to reconnecting with you on the next edition of California Employment News. We’ll see you next time.
Some California cities have raised their local minimum wage above the state rate of $16.50. In this episode of California Employment News, Weintraub Tobin attorneys Nikki Mahmoudi and Chris Horsley cover key updates in cities like San Francisco, Berkeley, Emeryville, and Alameda.
Watch this episode on the Weintraub YouTube channel.
Show Notes:
Nikki: Hi, everyone. Thank you for joining us for this installment of the California Employment News, an informative video and podcast resource offered by the Labor Employment Group here at Weintraub Tobin. My name is Nikki Mahmoudi, and I’m an associate in the Firm’s Labor and Employment Group. And today, I’m joined by my colleague, Chris Horsley.
Today, we’re going to be providing a quick minimum wage update at the local level. So, we’re midway through the year a little bit more than that. And so at this point, California has not updated their minimum wage for 2026. We’re just providing an update on some local jurisdictions that have.
So, starting July first, 2025, some local jurisdictions in California have increased their minimum wage beyond the state’s required rate of $16. 50. Now, note, when a jurisdiction has a minimum wage and it’s higher than the state minimum wage, we want to go with that number. Another consideration to keep in mind is that there’s also specific minimum wage rates for certain workers. That includes certain fast food workers and certain health care workers. We’ve actually previously done CENs about those minimum wage increases, and we’ll make sure to leave those CN links for you in the description box.
Keeping that in mind, Chris, can you give me an idea of some of the general minimum wage increases we’ve seen at the local level?
Chris: Of course. I can give you a few examples in Northern California. As of July first, 2025, both San Francisco and Berkeley have increased their minimum wage to $19.18 per hour. Then in Emreville, we have among the highest minimum wage in the state of California with a minimum wage of around $19.90 per hour. Finally, we have Alameda, who has recently increased their minimum wage from $17 to $17.46 per hour. Remember, if any of these numbers are higher than the state minimum wage, we want to go with that number instead. That’s it for now.
You can continue to find our video series through thelelawblog.com or on the Weintraub Tobin YouTube channel.
Thank you everyone for joining us, and we look forward to reconnecting with you in the next edition of California Employment News.
In this episode of California Employment News, Lizbeth (Beth) West and Meagan Bainbridge present part four of the Workplace Investigation Series, discussing best practices for effectively memorializing the investigation in a report.
Watch this episode on the Weintraub YouTube channel. You can also watch part one, part two, or part three of this series.
In this featured episode of California Employment News, Lizbeth (Beth) West and Meagan Bainbridge present part three of the Workplace Investigation Series, discussing how to make reasonable investigative findings once all evidence is collected.
Watch this episode on the Weintraub YouTube channel here or listen to this podcast episode here. You can also watch part one and part two of this series.
In this featured episode of California Employment News, Lizbeth (Beth) West and Meagan Bainbridge present part two of the Workplace Investigation Series, discussing best practices for collecting information during a workplace investigation.
Watch this episode on the Weintraub YouTube channel and find the first installment of this series here.
Meagan: Hello, everyone. Thank you for joining us for this installment of the California Employment News, an informative video resource offered by the Labor and Employment Group at Weintraub Tobin.
My name is Megan Bainbridge, and I’m a shareholder in the Labor and Employment Group. And today, I’m joined by my partner, Beth West. Today’s episode is part two of a four-part series discussing effective and defensible workplace investigations. In the first part of the series, Today, we discussed what steps to take when an employer first learns of a complaint or has knowledge of some alleged misconduct in the workplace. Today, in part two, we’re going to discuss best practices for gathering information. Beth, why don’t you start us off and tell us what investigator should do first to ensure they gather all relevant facts about the allegations.
Beth: Thanks, Megan. Well, in order to conduct an effective investigation, the investigator must gather all relevant facts about the allegation. There are some planning The following steps that you as the investigator can take in order to stay focused on the issues within the scope of the investigation and avoid what is called scope creep, which we’ll discuss later. First, create a plan before you begin interviewing witnesses. If there is a written complaint, you can use that as a starting place, a roadmap or blueprint of the issues that define the scope of what’s going to be investigated. This can also help identify which witnesses to talk to first and what if any, may need to be reviewed prior to interviewing witnesses. If there’s no written complaint, discuss the verbal complaint or concerns that have been raised with the client or stakeholder, and prepare a scope outline or memo to ensure that the scope of the investigation is clear. Determine your initial witness list, but don’t be wed to it. As you speak to witnesses or gather information, other witnesses may be identified that you’ll have to interview. Determine what documents need to be obtained and you’re going to obtain those.
You may be able to request some of the documents from the client or stakeholder, for example, an org chart or policies or some other company document. However, some documents may come directly from the witnesses that you interview. You should also carefully consider whether you need to view certain documents. For example, is it necessary to do a full review of the complainant or respondent’s personnel file? The allegations and scope of the investigation will help determine this, but investigators should not make it a standard practice to review personnel files and other documents that aren’t apparently relevant. Doing so could potentially influence the investigator in a way that’s not appropriate and could result in bias. Create an outline of the issues, the topics, or the questions for your witness interviews. Again, it’s not a script and you shouldn’t be wed to it. Instead, it should contain the overall topics to address with the witnesses based on the allegations within the scope. Remember to always consider scope, what it is you’re trying to investigate, what information you’re trying to obtain. It’s important to check in on scope at the planning stage and throughout the investigation and be aware of what’s called scope creep.
Scope creep happens when you start focusing on issues and investigating allegations that are not within the scope of the investigation. Finally, consider where the witness interviews take place. It should be in a private location where discussions can take place out of the presence of others and where witnesses feel comfortable. It could be in person. Matter of fact, in-person interviews are very effective, but it It could also be via Zoom or even over the telephone. Megan, once these preliminary steps have been taken, what should the investigator do next?
Meagan: Start talking to the witnesses. I mean, most investigators are probably going to start with the complainant. That’s the person making the complaint. Then based on that information, whether the individual provides names of other individuals who have knowledge, that at that point, the investigator will then likely seek out those third-party witnesses. That have been named by the complainant. Following those third-party witnesses, those third-party witnesses, the investigator will then generally reach out to the respondent to get his or her response to those allegations that are being investigated. When you’re discussing or when you’re interviewing the third party witnesses, remember, these could include former employees. They could include individuals who are not employed by the company. If that occurs, you’ll want to make sure you’re having discussions with the employer to determine whether or not those individuals will be reached out to. But just remember that the mere fact that the person is not a current employee of the employer is not instructive. Those are still individuals with relevant information that may need to be interviewed. As I said earlier, you’re usually going to conclude the investigation by speaking to the respondent. That respondent may give you additional people to speak to, to give their side of the story, and at that point, you would then speak to those individuals.
When speaking to the respondent, it’s imperative that the investigator be prepared to ask the hard questions. That is this true type of question. For an investigation to be defensible, the respondent must be given notice of all allegations being made against him or her and provided an opportunity to respond to those allegations. When speaking to individuals, whether it’s the respondent, the complainant, or some third party individual, the investigator will likely use the same questioning techniques. Specifically, questions should start broadly. Then seek to find the details from there that are needed to fill in the story. Investigator should be very careful to avoid putting words into the witness’s mouth and instead get the information from the witness directly. Further, at the beginning of all interviews, all witnesses should be given the same admonitions. This will largely replicate what was provided in the notice letter, namely that the investigator will direct all witnesses to tell the truth, inform the witnesses of the company’s no retaliation policy, and ask employees to keep the interview and the contents thereof confidential. Beth, What do investigators need to consider next?
Beth: Well, finally, the investigator has to determine how these witness interviews are going to be documented or preserved. And there are different methods, and different investigators have different preferences. One method is for the investigator to take notes as he or she is interviewing the witness, either electronically or handwritten. Another method is to prepare witness statements, which you can then have the witness review and sign as an accurate account of what they’ve shared with you. And then also some investigators record witness interviews, provided the witness has provided his or her consent to the recording. But there’s one thing to remember, however, that the recording will not only record what the witness says, but also what you, the investigator, say. So this means there will be a record of how well you ask the question, whether you put words in the witness’s mouth, as Megan referred to, whether you ask compound questions, or worse yet, whether you failed to ask a relevant question. Well, that’s it for today, Megan. What’s up for our next installment of Effective and Defensible Investigations?
Meagan: Well, in part three of this series, we’re going to be discussing best practices for making factual findings. You can continue to follow along by subscribing to our YouTube channel or by finding us on our website at thelelawblog.Com. We’ll see you next time.
In this episode of California Employment News, Lizbeth (Beth) West and Meagan Bainbridge present part one of the Workplace Investigation Series, discussing how to start an investigation following an employee complaint.
Watch this episode on the Weintraub YouTube channel.
In this edition of California Employment News, Meagan Bainbridge and Nikki Mahmoudi break down the basics of California paydays — from the timing of wage payments, payday considerations, and posting obligations. Whether you’re an HR pro or a business owner, this is a must-know compliance topic.
Watch this episode on the Weintraub YouTube channel.
Show Notes:Meagan: Hello, everyone. Thank you for joining us for this installment at the California Employment News, an informative video and podcast resource offered by the Labor and Employment Group at Weintraub Tobin.
My name is Meagan Bainbridge, and I’m a shareholder in the firm’s labor and employment group. Today, I’m joined by my associate, Nikki Mahmoudi. Today, we’ll be talking about the basics of employed paydays. Nikki, can you start us off?
Nikki: Of course. The California Labor Code is specific about the timing of wage payments and the regularity of paydays. All wages, with some exceptions, earned by an employee are due and payable twice during each calendar month on days designated advanced by the employer as regular paydays. So generally, labor performed between the first and 15th of the month is going to be paid for between the 16th and the 26th day of the month during which the labor was performed. Then labor performed between the 16th and last day of the month of any calendar month will be paid for between the first and the 10th day of that following month. With that said, employers don’t have to use that twice a monthly schedule. They can choose to pay employees weekly, bi weekly, or even semi monthly. By designating a regularly scheduled payday with payment within seven calendar days of the end of the pay period during which wages were earned. When it comes to exempt employees, and we’re talking about executive, administrative, and professional employees of employers covered by the Fair Labor and Standards Act, their salaries may be paid once a month on or before the 26th day of the month during which the labor was performed.
Meagan: If that entire month’s salary, including any unearned portion between the payment and the last day of the month are paid at that time. Then when it comes to overtime payments, and here we’re talking about your non-exempt employees, generally, with some exceptions, payment of overtime wages earned in one pay pay period can be delayed until no later than that next pay period. Note, this is only going to be for the payment of overtime wages. So straight time wages must be paid within the times we discussed. If an employer chooses to pay overtime in this manner, they have to make sure on the wage statement to, one, itemize that overtime payment as a correction, and two, the correction is going to state the inclusive dates of the pay period for which the employer is correcting its initial report of how the payday has worked. Megan, can you give us a quick overview on other considerations employers should keep in mind with paydays?
Nikki: Yeah, sure. Let’s start with circumstances in which a payday falls on a holiday or a weekend. Generally, if an employer is closed on a payday that falls on a Saturday or Sunday or a holiday listed in the California Government Code, that employer can pay wages the next business day. For example, if a regularly scheduled payday falls on the 20th of the month, and that happens to be a Sunday, the wages for payroll period may be paid that Monday. With that said, it’s always helpful to talk to your counsel to ensure you’re timely paying your employees. Another question I get a lot from employers is whether they can change their paydays. The answer is generally yes. As long as you’re still complying with the labor code requirements and you do provide advanced notice. But at any point you’re considering to change the pay date schedule, there’s not necessarily a specific law requiring a particular amount of notice to employees, but to avoid potential violations of pay days, employers should probably notify employees that the plan changed at least one full payroll cycle in advance of the new schedule, and I’d actually recommend a couple of additional payroll cycles where practicable or possible.
Meagan: Also, What happens in the situation where a non-exempt employee fails to complete their time card? Well, employers should remember that even where an employee fails to turn in their time card, employers remain legally obligated to pay that employee on the established payday. Employers can still comply with this a time record by paying all wages it reasonably knows are due for the employee’s regularly scheduled work week. Let’s say an employee regularly works as scheduled 40 hours. The employer would then pay that 40 hours and defer payment of any overtime till the next regular payday. Finally, it’s important to keep in mind that the labor code does require that employers post payday information. Pursuant to labor code Section 207, employers are required to keep posted conspicuously a notice specifying the the pay days and the time and place of payment. Ideally, this posting should be at the regular place of work or at least somewhere where it can be seen by employees as they come or go or at the office or nearest agency for payment kept by the employer.
Nikki: Thanks, Megan. Well, that’s it for now. You can continue to find our video series and podcast through the lelawblog.com or on the Weintraub Tobin YouTube channel. Thank you everyone for joining us, and we look forward to reconnecting with the next edition edition of California Employment News.
In this installment of California Employment News, Ryan Abernethy and Nikki Mahmoudi provide an essential overview of California’s Fair Chance Act—also known as the Ban the Box law. Learn what employers need to know about using criminal history in hiring decisions.
Watch this episode on the Weintraub YouTube channel.
Show Notes:
Ryan: Hello, everyone, and thank you for joining us for this installment of California Employment News, an informative video and podcast resource offered by the Labor and Employment Group here at Weintraub Tobin. My name is Ryan Abernethy, and I’m a shareholder here at Weintraub Tobin. I’m joined here today with Nikki Mahmoudi, who is one of our great associate attorneys in the firm’s Labor and Employment Group.
We are here today to discuss a general overview of California’s Fair Chance Act or the Ban the Box law, which restricts employers’ use of criminal background checks for hiring decisions here in California. There are many features to this Ban the Box law, so this installment of the California Employment News will be a general overview and not an exhaustive review of all of its nuances. So, nick, you want to kick us off, and if you could briefly describe California’s Ban the Box law, and specifically got its name.
Nikki: Of course. As Ryan mentioned, here in California, the Fair Chance Act, otherwise known as the Banned the Box law, provides guidelines to employers on how to properly consider criminal history and employment decisions. Why is it called Ban the box. It’s because the law aims to remove the check box that was commonly included on job applications, which ask applicants to disclose whether they had a criminal record. The law requires employers with five or more employees, with a few exceptions, to to follow certain procedures when requesting and using criminal history information for pre-hired purposes. Specifically, regardless of the source of the criminal history information, employers must do the five following steps. The first, Two, is wait until a conditional job offer is made before asking applicants questions about criminal history or using criminal history information to inform their hiring decisions. Two, if the employer discovers the applicant has a conviction history, the employer must conduct an individualized assessment of the applicant’s conviction to determine whether it has a direct and adverse relationship with the specific duties of the job that justify denying the applicant the position. There are certain factors the ban the box law requires employers to consider in their individual assessments that we’ll discuss later.
Three, the employer must notify the applicant of any potential adverse action based on the conviction history. The notice must identify the conviction, include a copy of any conviction history report, regardless of the source, and state the deadline for the applicant to provide additional information such as evidence of inaccuracy, rehabilitation, or other mitigating circumstances. Four, the employer must give the individual at least five business days from the individual’s receipt of the pre-adverse action to respond to the employer’s preliminary notice. Now, if within Five business days, the applicant notifies the employer in writing that the applicant disputes the conviction history’s report’s accuracy and is taking steps to obtain evidence, then the employer must give the applicant an additional five days to respond. Five, the employer must consider all the evidence submitted by the individual and notify the applicant of any final adverse action, any existing procedure the applicant has to take to challenge the decision or request consideration, and the applicant’s right to file a complaint with the California Civil Rights Department. Ryan, can you tell us a bit about what type of positions are not restricted by the ban the box law, as well as what types of criminal records the employer can and can’t rely on?
Ryan: Sure. Thanks, Nikki. The ban the box law applies to not only outside applicants for employment, but also to existing employees who apply for or indicate a desire to be considered for a different position within their current employment. The law also applies as to existing employees who are subject to review when there is a change in ownership or management of a company. However, like you asked, Nikki, the law doesn’t apply to certain positions, including a position for which a state or local agency is otherwise required by law to conduct a conviction history background check. In addition, the law doesn’t apply to a position for a criminal justice agency. It doesn’t apply to a position as a farm labor contractor or to a position where an employer agent thereof is required by any state, federal, or local law to conduct criminal background checks. Some types of criminal records are categorically off limits to California employers. Unless the employer qualifies for very narrow exceptions, which we’re not going to get into today. The records that cannot be considered for employment decisions are the following. So any arrests that didn’t lead to a conviction, juvenile records, convictions that have been killed, dismissed, expunged, or statutorially eradicated pursuant to law, any referral to or participation in a pre-trial or post-trial diversion program.
And further, as of 2024, California law prohibits employers from requesting information about prior cannabis use from an applicant for employment or using any information obtained about prior use from a criminal background check to make hiring decisions. Employers should be careful if you have any blanket policies that you won’t hire anyone convicted of a certain crime. As Nikki mentioned, the ban the box law requires employers to conduct individualized assessments of the individual’s conviction history. There are certain factors that employers are required to consider if their individual assessments before making an employment decision based on the criminal history of that particular applicant. These include, first is the nature and gravity of the individual’s criminal history. Category, like the harm caused by the criminal conduct. The employer also has to consider the amount of time that has passed since the conviction. Third, they have to consider the nature of the job the individual is seeking. There must be a direct and adverse relationship with the specific duties of a job that justify denying the applicant the position. For instance, someone applying for an accounting position who is guilty of embezelment or check fraud a year ago, that would likely be a legitimate conviction to consider, given the close connection with the job duties and the character of the conviction.
So, Nikki, can you tell us how the ban of box law relates to other employment laws?
Nikki: Definitely. So all employers must make sure that any consideration of criminal history information that is not disparately impact individuals in a protected class, and that’s going to include race, gender, national origin, or other characteristics protected by law. When an employer wants to consider revoking the job offer, do not forget to consider that the applicant may belong to a FHA-protected class. When we’re talking about FHA, we’re talking about the Fair Employment and Housing Act. In fact, the ban the box law is part of that Fair Employment and Housing Act. If the applicant belongs to a protected class or discloses information during the application process that shows that the applicant might be in a protected class, consult with an attorney before you make your final decision to revoke the conditional job offer. Compliant with California’s many employment laws are definitely difficult, or they can be difficult. Additionally, some local governments, such as San Francisco and LA, have enacted their own versions of the ban the box law. These ordinances include other prohibitions and requirements related to obtaining and using criminal background history information. Employers covered by a local fair chance ordinance must comply with both state and local law.
The local ban the box ordinances in those jurisdictions often exceed the requirements found in the state’s ban the box law. So again, we encourage I encourage you to review your background check policies to ensure compliance and talk to counsel if you have any questions.
Ryan: Well, as you can see, I hope we made the message very clear that when it comes to considering criminal history with job applicants or your employees, it can be very complicated. Because of that, it’s always helpful to consult with counsel. And that’s it for this episode. You can continue to find our video series and podcast through thelelawblog.com or on Weintraub Tobin’s YouTube channel. So thank you everyone for joining us. And we look forward to reconnecting with the next edition of California Employment News.
Tune in to the latest edition of California Employment News, where Meagan Bainbridge and Nikki Mahmoudi dive into LA County’s Fair Work Week Ordinance. Learn about key protections for retail workers, including scheduling rights, premium pay for schedule changes, and more.
Watch this episode on the Weintraub YouTube channel.
Show Notes:
Meagan: Hello, everyone. Thank you for joining us for this installment of the California Employment News, an informative video and podcast resource offered by the Labor and Employment Group at Weintraub Tobin. My name is Meagan Bainbridge. I’m a shareholder in the Firm’s Labor and Employment Group, and today I’m joined by my associate, Nikki Mahmoudi.
Today, we’ll be talking about LA County’s Fair Work Week Ordinance, which is set to take place on July first, 2025. This legislation will provide covered employees with various protections related to their work schedules and working hours. Nikki, could you please provide us with some background information regarding the ordinance?
Nikki: Of course. So this ordinance will apply to retail businesses in the unincorporated areas of LA County that have at least 300 employees globally. When we’re talking about globally, this is going to include franchises and those employed through temporary staffing agencies. Covered employees will consist of employees as such businesses who, one, qualify for minimum wage, two, perform at least two hours of work in a work week in the unincorporated areas of Los Angeles County for a retail employer, and three, are assigned a primary work location and duties that support retail operations, including but not limited to a retail store or warehouse. Why protections for these specific employees? The LA County explained this ordinance is meant to meaningfully support its retail workers who often are paid low wages and work unpredictable schedules with little or no advanced notice. Meagan, could you tell us some of the protections under the Fair Work Week ordinance?
Meagan: Sure. Well, the first thing employers should familiarize themselves with is the Good Faith Estimate of Work Schedule Principle. Here, employers are required to provide workers with a written good faith estimate of their work schedule before hiring and within 10 days of a current employee’s request. This is defined as a reasonable fact-based prediction of an existing retail employee’s work schedule or a prospective retail employee’s prior hours worked by a similarly situated retail employee or other similar information. While a good faith estimate is not a binding contract, Correct. If an employee’s actual hours, days, location, or shifts work substantially deviate from that good faith estimate, the retail employer must have a documented, legitimate business reason, unknown at the time of providing the good faith estimate to substantially deviate from the plan. Further, while the ordinance provides that covered employees have the right to request a preference for certain hours, times, or locations of work, employers may accept or decline those requests, provided that the employer notifies the employee in writing of the reason for any denial. Finally, employers are required to provide employees with advanced notice of their work schedule at least 14 calendar days before the start of the work period.
Nikki: Employers can provide notice by posting the schedule in a conspicuous and accessible place in the workplace, by electronic means, or in person. It’s worth noting that any changes to the work schedules must be provided, and employees have the right to decline the hour, shifts, or work location changes not included in the original schedule. If the changes are agreed upon, the changes must be agreed to in writing and in advance of the change. Nikki, other protections are part of the fair work requirements?
Meagan: The one is going to be that before hiring a new retail employee or using the contractor, temporary service, or staffing agency to perform work, a covered employer must first offer the work to current retail employees. If one, one or more of the current retail employees is qualified to do the work as reasonably determined by the employer, and two, the additional work hours would not result in the payment of overtime. There’s a procedure to A covered employer must make the offer either in writing or by posting the offer in a conspicuous location where notices to covered employees are customarily posted. Notice must be at least 72 hours before hiring a new employee. And upon receipt of the offer, a retail employee must have 48 hours to accept the offer. Upon the expiration of the 48 hours period, the retail employer may hire new employees to work any additional hours not accepted by current employees. An employee who accepts these additional hours pursuant to this rule, they’re not entitled to premium pay for those additional hours. Another protection is that the the ordinance requires covered employers to issue premium pay whenever the employer changes an employee schedule.
When the schedule change results in no loss of time or additional work exceeding 15 minutes, the employer can owe the employee one additional hour of pay at the employee’s regular rate of pay. But changes that result in a loss of work time, as well as other scheduling changes, can require the employer to compensate the employee at one half of the employee’s regular rate of pay for the lost work time. For example, if an employee was scheduled to work six hours and the employer reduces this to three, the employee is going to be owed premium pay equal to one and a half hours of work. Now, premium pay will not be required if an employee initiates the request to schedule a change, an employee voluntarily accepts a schedule change initiated by employer due to another employee’s scheduled absence, an employee accepts additional hours that were offered by the employer pursuant to the access to hours provision of the ordinance that we talked about earlier. Employee’s hours are reduced to the employee’s violation of the employer’s policies. The employer’s operations are compromised pursuant to law or extra hours work to require the payment of overtime. Another protection involves coverage for missing work shifts.
Employers are prohibited from requiring an employee to find coverage for a shift if they cannot work due to protective reasons. Another protection that we’ll be covering today is the rest between shifts. Employers are required to give employees at least 10 hours of rest between shifts unless the employee gives written consent to be scheduled for a shift that begins less than 10 hours after the conclusion of the previous shift and pays the employee a premium time of an hour and a half for each hour of the second shift not separated by at least 10 hours. Megan, are there any other considerations to keep in mind?
Nikki: Just a couple of things. First, there are notice requirements. Every covered employer will be required to post in a conspicuous place at the workplace or job site where employees work, the notice of retail employees work week rights published each year by the Los Angeles County Department of Consumer and Business Affairs. Second, it’s unlawful for a covered employer to discriminate in any manner or take any adverse action against any person in retaliation for exercising their rights protected under this ordinance. Further, penalties and enforcement for violations could include payment of restitution and penalties, as well as employees have a private right of action to bring a civil complaint. As such, if you’re an employer who falls under this ordinance, it’s really important to understand the various requirements, train your managers and staff appropriately, and work with your legal counsel to ensure you’re engaging in compliant practices.
Thank you, Meagan. Well, that’s it for now. You can continue to find our video series and podcast through the lelawblog. Com or on the Weintraff Tobin YouTube channel. Thank you everyone for joining us, and we look forward to connecting with you on the next edition of California Employment News.
Meagan: Thanks, everyone.
In this episode of California Employment News, Meagan Bainbridge and Ryan Abernethy break down the latest PAGA reforms and what employers need to know to reduce penalties and stay compliant. From new cure opportunities to proactive audits, they cover actionable steps to protect your business.
Watch this episode on the Weintraub YouTube channel.
Show Notes:
Meagan:Hello, everyone. Thank you for joining us for this installment of California Employment News, an informative video and podcast resource offered by the Labor & Employment Group at Weintraub Tobin. My name is Meagan Bainbridge, and I’m a shareholder in the firm’s Labor & Employment Group. And today, I’m joined by my partner, Ryan Abernethy. As we recap for you, a recent seminar we presented on discussing how employers should respond to that dreaded PAGA letter.
Ryan, can you remind us what the current state of PAGA is?
Ryan:Sure thing, Megan. Yeah. So as many of you probably already know, there were some massive PAGA reforms back in July of 2024 that were actually mostly employer-friendly, provided the employers actively took advantage of the new opportunities. Later in the year, in October of 2024, the LWDA gave us some more information about these new options that we’ll discuss here. Some of these beneficial changes for employers include things like, for instance, there’s no more stacking for certain derivative penalties for certain violations. This way, employers are less likely to get buried in snowballing penalties for relatively minor violations. In addition, penalties are determined by pay period. Employers who paid weekly could be subject to double liability simply because they generously paid their employees every week. Under the reform, penalties are now reduced by 50% by employers who pay weekly. Perhaps most significant were the enhanced cure opportunities that the new Paga reforms present for employers. To cure just means to rectify the violation by, for example, paying for an unpaid wage or fixing an incorrect wage statement. So under the old PAGA, employers had the opportunity to cure only a limited number of violations within a very narrow 33-day window after they received the Paga notice.
Now, employers can reduce their penalties by up to 85% if they can show that they took all reasonable steps to maintain compliance with the labor code before they received the PAGA notice. So this change is really exponential essentially increased the value of taking proactive measures to become labor code compliant right away. Such steps could include manager trainings and payroll audits, which Megan will discuss in greater detail later on this episode. In addition, employers can now see a reduction in PAGA Penalties by 70% by taking all reasonable steps to remedy a violation within 60 days after they were served with a PAGA notice. Now, even if the LWDA decides to investigate the PAGA allegations, the employer can still cure the violations during the 120-day notice period and avoid penalties that way as well. Small employers, which is defined as those with fewer than 100 employees, can also now submit a cure plan within 33 days after receiving the Paga notice. This is different than actually effectuating the cure. All they have to do is propose a plan during that time. Then a conference will then be set to evaluate the sufficiency of the proposed cure, and the employer has 45 days after that plan is approved to complete the cure.
So, Meagan, with that, can you tell us more about steps employers can take right now to limit their pocket liability in the future?
Meagan:Yeah. Well, the receipt of a pocket letter is a great opportunity for employers to audit their employment policies to ensure compliance with California’s wage and hour laws. The purpose of the self-audit is to identify and correct issues to reduce possible exposure. We generally recommend employers their employment policies regularly to ensure compliance, but it absolutely should be done when wage and hour violations have been alleged. Here are a few recommendations with respect to completing that wage and hour audit. First, you’re going to want to figure out who’s going to conduct the audit. We always recommend working with your attorney to conduct the audit to ensure that the attorney-client privilege is retained. The last thing you want is to have some discoverable document detailing all your suspected wage and hour violations. Second, decide the scope of the audit. Are you reviewing all records? Are you reviewing the records within a certain department? Are you spot checking your employees? That’s going to be something you want to decide before you delve into the actual review process. Third, you’re going to review documents. This includes wage statements and time records to ensure they contain all information necessary. For example, do your wage statements include the legal name and the address of the hiring entity?
Are the name of the employee and the employee’s ID number their last four digits of their social security number included on the pay stuff? Do your time records contain started in times and all meal breaks? If a meal break appears untimely, was a premium paid? Fourth, you’re going to want to review your pay practices. Are you paying the correct minimum wage? Are your employees working off the clock? Are you paying overtime correctly? Are you providing regular meal and rest breaks? Are you paying meal and rest break premiums as needed? Does your overtime pay and meal and rest break premium pay include other forms of compensation, such as commissions or incentive bonuses? Are your exempt employees actually classified properly? Are you paying exempt employees the requisite minimum salary for the exemption? Are you calculating paid sickly properly? And are you properly reimbursing your employees for all business expenses incurred? Fifth, review your timekeeping practices. Do employees perform tasks before or after clocking out? For instance, do they have to lock up and they’re not getting paid for it? Can employees review and confirm their time records? Are attestations being utilized to confirm meal and rest breaks are being provided each day?
Sixth, review your written policies and training practices to ensure still comply with the law and have been regularly updated. That’s just a quick review with the types of things we would like to see included in any audit being conducted. Ryan, why don’t you now provide some suggestions for what employers could do with the results of that investigation?
Ryan:Well, when possible, employers should correct the issue. To do this, we generally recommend the following five-step procedure. First is to calculate how much the employee was underpaid. Next is to inform the employee of the mistake, and the next course of action, which is repayment. Third, or often repayment. Third is, remedy the situation by including the missed wages as soon as possible and no later than the next paycheck, and consider whether any penalties are owed because of that. Fourth, you want to get the employee to sign an acknowledgement that the error was fixed and that no other wages are owed. And then fifth, you can get an actual waiver of claims. Or can you get a waiver of claims? Is it something you have to determine? There are many times, however, correction is not possible. In these circumstances, employers really should work with their counsel to reduce liability, but at the very least, fix the issue immediately, so liability is limited on an ongoing basis. Take steps to ensure some mistakes aren’t made again. This can include future audits and training of your supervisors.
Meagan:Thanks, Ryan. That’s it for today. Thank you all for joining us. You can continue to find episodes of the California Employment News that cover many other topics that are of interest to California employers at the Weintraub Tobin YouTube channel, wherever your favorite podcast is found, or on our LNE blog at www. TheLELawblog.Com. We’ll see you next time.
Weintraub Attorneys Nikki Mahmoudi and Tomiwa Aina discuss the essential documentation and paperwork employers need to provide when an employment relationship ends. From final paychecks to COBRA notices and WARN Act requirements, this episode of California Employment News provides key insights to help employers stay compliant.
Watch this episode on the Weintraub YouTube channel.
Show Notes:Nikki: Hi, everyone. Thank you for joining us for this installment of California Employment News, an informative video and podcast resource offered by the Labor and Employment Group here at Weintraub Tobin. My name is Nikki, and I’m an associate in the group, and I’m joined by my fellow associate, Tomiwa Aina. In previous CEN, we’ve talked about termination of the employment relationship. Today, Tomiwa and I are going to discuss documentation and paperwork employers will want to provide employees when the employment relationship ends. Please note, this is only a general overview and may not necessarily be exhaustive of all documentation employers are required to provide their employees. Tomi, did you want to start us off by talking about employees’ final paycheck?
Tomiwa: Yes. Thank you, Nikki. Regardless of how the employment relationship ends, whether that’s because the employee resigned from their employment, the employer terminated the employee, or there was a reduction in force, you will have to provide an employee with their final paycheck, including all earned wages, any accrued vacation, or paid time off. But note that the timing of when the employee receives their final paycheck can depend. For example, an employee without a written employment contract for a definite period of time who quits without given 72 hours prior notice to their employer must be paid all of their wages, including accrued vacation within 72 hours of quitting. Whereas an employee who gives at least 72 hours’ notice prior to their quitting and quits on the day that they have given in the notice must be paid all their wages at the time of their quitting. Similarly, employees who are discharged must be paid all wages due at time of termination. Nikki, can you tell us generally about some documents that employers will want to provide to their employees?
Nikki: Yeah, of course. I’m happy to provide some general ideas of documents employers will want to provide, as we said at the beginning of the video, this may not be exhaustive. It’s just some things you’ll want to consider. When employees are involuntarily terminated, and by that we mean they’re discharged or there’s a layoff, the company must give immediate written notice to the employee of a change in the employment relationship under unemployment insurance code section 1089. Now, that notice must contain certain information. That’s going to include the employer’s name. Another thing you will want to provide is the name of the person to contact at the company if the Employment Department division, otherwise known as the EDD, needs further information. You’ll also want to provide the employee’s name, their Social Security number, the type of action, so whether that’s a voluntary quit, layoff, termination, etc, and the date of the action. With this notice, you’ll give a copy to the employee and then retain a copy for your records. An employee must be given a copy of the notice no later than the effective date of termination. Employers can request that the employee sign acknowledgement of receipt of the notice, but you are not required to do so by law. Continuing on that on the topic of discharger laid off employees, the employer must provide the employee with Employment Development Department Pamphlet DE-2320, which that will explain to employees their rights to unemployment insurance, state disability insurance, and paid family leave. This must be distributed no later than the effective date of that termination or layoff. Now, another thing to think about is with employers with 20 or more employees, COBRA, otherwise known as the Consolidated Omnibus Budget Reconciliation Act, rights notice and election form needs to be provided to employees who are participating in the employer’s group health plan, and to any of the terminated coordinating employees’ dependents on the plan within the time requirements under CROBA regulations. I know earlier we were talking about employees who have been discharged or laid off. This is for any employee where the time a relationship ends. It’s not limited to just discharge or laid off employees. For smaller employers, employers must notify any covered employees of their CalCobra continuation rights. We’re talking about smaller employers, we’re talking about under 20, so between 2-19. CalCobra will be offered to both the terminated employees of small employees, like we talked about who are participating in the Employers Group Health Plan, and terminated employees covered under federal Cobra when their 18 months of federal Cobra coverage expires. One other thing to think about is that the California Department of Health Care Services requires employers with 20 or more employees to provide the health insurance premium plan, or sorry, premium payment, otherwise known as HIP notice, DHCS9061 to certain employees who would be covered under the program. Tomi, are there any other general documents or things employers will want to provide employees or think about?
Tomiwa: Yes, Nikki. There are some things that employers should also consider. California Labor Code Section 2808(b) requires employers to provide to their employees upon termination a notification of all continuation, disability extension, and conversion coverage options under any employer-sponsored coverage for which the employee may remain eligible after the employment terminates. Act. Additionally, the Worker Adjustment and Retraining Notification Act, otherwise known as the Warn Act, requires certain employers to give their affected employees at least 60 days written advanced notice of any planned closings or mass layoffs. Now, California’s version of the Warn Act is broader in scope than the federal act and affects more employers. So, this is something that you should be considering as a California employer. Covered employers in general are employers who are covered by the federal Warn Act if they have 100 or more employees, not counting part-time employees who have worked less than six months in the last 12 months. That does also not include employees who work an average of less than 20 hours a week. Now, the federal Warn Act also applies to employers who employ 100 or more employees and who together work at least 4,000 hours per week. So, think of plans, and those are the type of employers that you want to be considering here. Now, under California law, employers who directly or indirectly own a covered establishment must give notice to the affected employees of the covered establishment. Now, a covered establishment is any industrial or commercial facility or part thereof that employs or has employed 75 persons within the preceding 12 months. There is no requirement that the worker be employed full-time in California. So, both full-time and part-time employees will be countered towards California 75-person requirement. Now, this is a general overview of the Warn Act. We could probably spend all day talking about this. It’s always helpful to take counsel on whether or not it applies to your company and workforce. So please let us know if you have any questions.
That’s it for now, though. You can continue to find our video series and podcast through the lelawblog.com or on the Weintraub Tobin YouTube channel. Thank you, everyone, for joining us, and we look forward to reconnecting with the next edition of California Informed News.
Recent legal developments have impacted drug and alcohol policy enforcement in the workplace. In this episode of California Employment News, Weintraub Labor & Employment attorneys Lizbeth “Beth” West and Ryan Abernathy provide an overview of the latest legal updates, best practices for implementing these policies, and how they apply to remote workers.
Watch this episode on the Weintraub YouTube channel.
Show Notes:Ryan: Hello, everyone, and thank you for joining us on this installment of California Employment News, an informative video resource offered by the Labor and Employment Group here at Weintraub Tobin. My name is Ryan Abernethy. I’m joined today by my partner, the Distinguished Beth West. For today’s episode, we’ll be discussing some developments in the area of drug and alcohol policy enforcement in the workplace and how to best implement those policies with remote workers. Beth, why don’t you start us off and tell us about the current state of the law regarding cannabis use in the workplace.
Beth: Thanks, Ryan. Even though federal law still classifies cannabis, also called marijuana, as an illegal controlled substance, many of you probably know the use of medical and recreational marijuana is legal for adults in California. Because marijuana use is legal in California, most, but not all employees have certain employment protections now for the legal off-duty use of marijuana. Pursuant to A. B. 2188 and S. B. 700, which are codified in our California Government Code and went into effect January first of 2024, California employers with five or more employees may not request information about prior cannabis use from an applicant for employment or use any information obtained about prior use from a criminal background check when making hiring decisions. Also, covered employers may not make any employment decisions, including hiring, termination, or any other decision regarding the terms and conditions of employment, or penalize current employees because of the employee’s lawful use of cannabis off the job and away from the workplace. There are exceptions to this. An employer is permitted to make those decisions if they are required to do so under applicable law. For example, employers in the construction industry or those that are subject to federal background or security clearance obligations.
However, employers can still mandate that employees not report to work under the influence of cannabis or possess or use cannabis during work hours, which would include during meal and rest periods or at any work location or work event, including while driving for work. Employers can still conduct post-offer pre-employment drug screens for applicants and also conduct drug tests for current employees in certain situations. However, there are limits and requirements under the law when they do so. I’m going to turn this over to Ryan now, who will discuss employer policies in drug testing.
Ryan: Thanks, Beth. Given this new cannabis law, the next question that naturally arises is, to what extent can companies test their employees for the use of cannabis and other drugs in the workplace? Off the top, it’s important to note that random drug testing is almost never permissible in California. But for job applicants, employers can conduct post-offer, pre-employment drug screens, including for marijuana, and can deny employment if the test is positive for what’s called psychoactive THC. Even if the applicant was legally using the marijuana, medicinally or recreationally. For current employees, California law prohibits an employee from taking adverse action against an employee on the basis of drug test results showing only non-Psychoactive cannabis metabolites. We’re going to use that term a lot here. What that is, a non-Psychoactive cannabis metabolite, those are substances in a person’s hair, in their blood, urine, or other bodily fluid that indicates the person used cannabis at some point in the past. Employment drug testing for these types of metabolites is impermissible because it’s not possible to distinguish whether the presence of those metabolites was due to lawful use, lawful off-duty use, or impermissible on duty cannabis use. So drug testing can also be required in certain circumstances after an employee is involved in an accident.
Employers can also conduct what’s called reasonable suspicion drug testing. If an employee appears to be impaired at the work site, for instance, based on observable and objective signs that an employee may be under the influence of drugs while at work, that employee may be drug tested. Such signs of this could include things like odors emanating from the employee, slurred speech, lethargy, or bloodshot eyes. Companies should provide reasonable suspicion testing training to supervisors or other company officials that are tasked with identifying these types of signs so they have the ability to detect and document the signs and symptoms of drug and alcohol use. Employees who take reasonable suspicion testing should be required to remain off-duty until a negative drug or alcohol test is received. If testing proves positive, then that employee may be subject to disciplinary action up to and including termination after the company has investigated the circumstances and determined that company policy has been violated. Because of this, employers are wise to place this policy squarely in the handbook so that employees understand that compliance with the company’s policy against drug and alcohol use is a condition of their employment, and so that they’re on notice that they may be subject to drug testing under certain circumstances.
Beth, with that, can you tell us how drug testing policies can be enforced by employers with remote workers?
Beth: Yeah. Since remote workers are just that remote and not physically present in the workplace, it may be pretty hard to know if they are complying with the employer’s drug and alcohol policy. Since testing for reasonable suspicion has to be based on some objective facts or observations, alcohol in the breath, smell of marijuana, some other indication or physical symptom of being under the influence, it’s probably pretty hard at times for an employer to determine if an employee may be under the influence while working remotely. But there are some indicators that could give rise to reasonable suspicion that a remote worker may be under the influence. Those would include things like slurred speech on calls or virtual meetings, appearing disheveled or showing some signs of intoxication during a virtual meeting, saying inappropriate or incoherent things during a call or a virtual meeting, Things like increased or poorly explained absences from a scheduled virtual meeting or last-minute cancelations of those meetings without some credible reason, changes in an employee’s job performance, changes in their interactions with coworkers, and any other erratic behavior or change in the employee’s disposition. Those could all potentially be signs of reasonable suspicion. However, while one indicator may not enough to constitute reasonable suspicion, if an employer notices a number of them or there’s some pattern of conduct or overall change in the employee’s behavior, it’s likely time to address it.
If we’ve determined there is reasonable suspicion that the remote worker may be under the influence of drugs or alcohol while working, the employer should contact that employee privately to discuss it. The employer should explain the conduct that has been observed and reiterate the employer’s expectation that all employees, whether they’re working on-site or remotely, must comply with the employer’s drug and alcohol policy. Depending on how the employee responds, the employer can It is advised that any further indication, reasonable suspicion that the employee may be violating the drug and alcohol policy may require the employee to undergo an immediate drug or alcohol test and could result in disciplinary action up to and including termination of employment pursuant to the terms of the policy. If the employee notifies the employer during a discussion like this that the employee has some substance abuse problem, The employer should likely, and again, depending on the circumstances, discuss the options available under an EAP program or some other program and accommodate the employee who says they want to seek rehab or treatment, provided that accommodation doesn’t create an undue hardship for the employer.
Ryan: Great. Well, thank you, Beth. Well, that’s it for today. Thank you all for joining us. You can find other episodes of California Employment News that cover many other topics of interest for California employers at the Weintraub Tobin YouTube channel or on the L&E blog at www. Thelelawblog.com. Thank you.
Beth: Thank you.
California expands employee rights for victims of violence: new leave policies and protections under AB 2499 take effect Jan 1. Weintraub attorneys Meagan Bainbridge and Shauna Correia discuss what employers need to know to update their policies in the latest installment of California Employment News.
Watch this episode on the Weintraub YouTube channel.
Show Notes:
Meagan:
Hello, everyone. Thank you for joining us for this installment of California Employment News. My name is Meagan Bainbridge, and I’m a shareholder in the Weintraub Tobin Labor and Employment department. And with me today is one of my partners, Shauna Correia. As you likely know, in California, employees who are victims of certain crimes and domestic violence have the right to take unpaid time off work when they need it, such as to get medical or legal help or to attend court proceedings. Today, we’re going to discuss Assembly Bill 2499, which expands this leave and requires additional accommodations for California employees who either are victims of qualifying acts of violence or who have family members who are victims. Shauna, can you remind listeners about the scope of the law that was in effect prior to the passage of AB 2499?
Shauna:
Labor Code Section 230 applied to all employers, regardless of size, and it prohibited employers from discharging or discriminating against an employee because of their status as a victim of a crime or abuse. It prohibited employers basically from discharging or discriminating against employees for taking time off to appear in court as a witness related to the crime or to obtain certain kinds of relief, like obtaining a restraining order or helping ensure the health, safety, or welfare of the victim or their child. Then, Section 230 also required employers to provide reasonable accommodations if the employee was a victim of domestic violence, sexual assault, or stalking, and they required an accommodation for the safety of the victim while they were at work unless it was an undo hardship. Labor Code Section 230.1 also imposed additional requirements and prohibitions on larger employers that have 25 or more employees. And those employers could not discharge or discriminate against employees taking time off for four reasons, basically seeking medical attention for injuries that were caused by a crime or abuse, or to obtain services such as from a domestic violence shelter or rape crisis center, or to obtain psychological counseling or mental health services for the crime, and then finally to participate in safety planning and take actions to increase safety from future crimes or abuse.
And then the companion to that would be the paid sick leave Labor Code Section 246.5 requires employers to allow employees to use their paid sick leave days on their request if they’re a victim of domestic violence, stalking, or sexual assault, and they need time off for those reasons.
Meagan:
Yeah, that’s right. Can you explain what has changed?
Shauna:
Sure. The first more procedural change is that these laws were moved out of the Labor Code and recodified underneath the umbrella of the Fair Implement and Housing Act. The importance of that is really a couple of things. One is the new rules will be enforced by the California Civil Rights Department, which enforces the Fair Implement and Housing Act for FIHA. This provides mechanisms for employees to bring civil actions in court rather than having them enforced by the Division of Labor Standards Enforcement, which is primarily responsible for enforcing wage and hour laws. So it makes some sense to move this statute there. But importantly, some of the definitions, and I’ll get into this in a little bit, but the rules for the leaves and accommodations now are going to more closely resemble the types of rules employers are more familiar with when they’re doing reasonable accommodations for disabilities under the FIHA. That is going to be more similar to the rules for family medical leave under the California Family Rights Act as well. And then, beyond just prohibiting discharging an employee, now it explicitly says that employers cannot engage in any form of retaliation against employees if they take or request to use the leave or their other rights under these laws.
Meagan:
Yeah.
Shauna:
I understand that Labor Code 230 and 230.1 apply to a specific list of crimes. And AB 2499, it’s a bit broader, is that right?
Meagan:
Yeah. So AB 2499 replaces some terminology that prior statutes referred to as crime or abuse. And now it talks about qualifying acts of violence. And so that’s more broadly defined. It still includes domestic violence, sexual assault, and stalking. But now it also includes any act, conduct, or pattern of conduct that includes bodily injury or death to someone, brandishing, exhibiting, or drawing firearms or other dangerous weapons, or any perceived or actual threat to use force against someone to cause physical injury or death. So it’s a little broader. A person can be a victim of a qualifying act of violence even if nobody has been arrested for or prosecuted or convicted of committing any crime.
Shauna:
Got it. So, does AB 2499 expand other definitions under the law?
Meagan:
Yes. So, the law previously provided some limited relief if the employer or their immediate family was not a crime victim. So, a couple of things have been expanded. So, the first is that the definition of family member has been expanded. So, under AB 2499, many of the protections under FIHA and paid sick leave now apply to not only an employee who is a victim of a qualifying act of violence but also any employee whose family member was a victim. And so, family members are broader than just immediate family and now include all the same individuals as under CIFRA. The biggest difference being that it now includes grandparents, grandchildren, or any designated person who doesn’t need to be a blood relative so long as that association with the employee is like a family relationship. Then again, now, just as under CIFRA, an employee can identify that designated person when they need to take the leave at that time. They don’t have to designate them in advance. However, an employer can limit the employee to only one person per 12-month period. As a result, if an employer has more than 25 employees or 25 or more employees, they’ll need to comply with certain anti-discrimination, anti-retaliation, reasonable accommodation, and paid sick leave requirements for this broader list of family members for employees who have these family members who are victims of qualifying acts of violence.
Okay.
Meagan:
And has a lot changed regarding the types of activities an employee can take time off to do, such as after an act of violence has occurred?
Shauna:
Yeah. So, the types of activities, there was a pretty long list already of the types of activities that victims of crimes could take. And so now victims of qualifying acts of violence can take additional categories, I believe, in addition to the ones that were already stated in the labor code. So, some of the new ones are providing care directly to a family member who’s recovering from an injury, seeking or obtaining civil or criminal legal services, participating, but also preparing to participate in or attend a civil, administrative, or criminal legal proceeding related to the act, or seeking or obtaining or providing child care or care to a dependent adult if that’s necessary to ensure the safety of that child or that dependent adult.
Meagan:
I understand that under the new law, employers can have the right to limit the total amount of leave taken. Can you describe those new limits?
Shauna:
Yes. Before, actually, there was no express limit on the amount of time an employee could take off of work. And again, this is unpaid leave. But now, AB 2499 allows employers to limit the total leave taken. The amount of leave an employee can take now really depends on whether the victim is the employee or the employee’s family member. So, if the employee is a victim, employers can limit the total leave taken by that employee to 12 weeks. But if the victim is a family member of an employee, then employers can limit it a little bit more. They can limit the amount of leave taken to help a family member relocate and try to move to a new location to five days, and they can limit the total amount of leave taken to 10 days. However, that doesn’t apply if the victim of the crime died as a result. If the employee needs time off, for example, to provide care to their niece or nephew, the child of a sibling of the employee, or to attend criminal proceedings that might extend past 10 days, the employee may take up to the full 12 weeks. This leave does expressly run concurrently with any leave that would be available under the CIFRA or the Federal Family Medical Leave Act. And it doesn’t provide an employee with rights to exceed that amount of leave under the FMLA.
Meagan:
Right. So, although this time is off as unpaid, an employee can use paid sick leave for these purposes if either the employee or the family member is a victim of qualifying acts of violence, right?
Shauna:
Yeah, right. And in addition to the leave, employers should also remember that these employees may need other accommodations if they are victims of qualifying acts of violence or their family members are victims. So, the requirements from the labor code will carry over to the new law, and again, they’re also expanded. So, for example, employers might need to make reasonable accommodations for employees who need safety measures to protect them at work, like changing the locks, changing the employee’s work telephone number, or even making scheduling or work location changes at the employee’s request.
Meagan:
Can employers deny leave?
Shauna:
Employers will still have the right to deny accommodations or leave if it’s an undue hardship. But in addition, employers do not need to make accommodations or provide leave if the employee has not disclosed their status as a crime victim. So unlike with disabilities, where the employee doesn’t need to disclose, they do need to tell the employer that they’ve been a victim of a crime. And employers can ask for documentation to confirm that the employee or their family member is, in fact, a crime victim. Okay.
Meagan:
So, bottom line, what should employers do to prepare for the law taking effect on January 1st?
Meagan:
Well, we encourage employers to go ahead and take a look at their handbooks and make sure that their policies comply with the new law, including making sure that the updated definitions are in place, harmonizing with CIFRA and the paid sick leave policy as well. The Civil Rights Department will be publishing a new notice before July 1, 2025. And once that’s available, employers will need to publish that new notice.
Meagan:
Thanks, Shauna. And that’s all the time we have for today. Please subscribe to our blog, thelelawblog.com, for updates on this and other topics. Thanks for watching this episode of California Employment News, and we’ll see you next time.
New changes to employment law are coming in 2025! Weintraub Labor and Employment attorneys Shauna Correia and Meagan Bainbridge give you an overview on what you need to know to stay compliant in the latest episode of California Employment News.
Watch this episode on the Weintraub YouTube channel here.
Show Notes:ShaunaHello, everyone. Thank you for joining us for this installment of the California Employment News, an informative video and podcast resource offered by the Labor and Employment Group at Weintraub, Tobin. I’m Shauna Correia, a shareholder in the Labor & Employment Group here at Weintraub, and I’m joined today by my partner, Meagan Bainbridge. We’re recapping some of the information that we covered at a recent seminar on some of the changes in employment law for California going into 2025. Meagan, what’s one bill that you’ve been talking to your clients about?
MeaganWell, one bill I feel like I haven’t heard as widely discussed as others is SB 1100, which prohibits a job advertisement posting application or other employment material from stating that an applicant must have a driver’s license unless there is a reasonable expectation that driving is a function of the position and that an alternative form of transportation cannot suffice. Generally, an alternative form of transportation can include, but is not limited to ride-hauling services such as Uber or Lyft, carpooling, biking, walking, that thing. In order to establish one of these alternative forms of transportation does not suffice, the employer should be prepared to establish that the alternative form would not be comparable in either cost or time. It’s important for all employers to review their applications and job postings to ensure compliance with this new bill.
ShaunaAre there any other documents you’re suggesting that your clients review?
MeaganWell, there’s a slight change to the Paid Family Leave Benefits Act, which employers should probably be aware of. Effective January 1, 2025, the employer’s ability to require employees to use up to two weeks of company-provided vacation before they can start receiving their PFL benefits paid by the state has been eliminated. Employers should review their leave policies and ensure that those policies do not currently require the use of paid vacation prior to receiving any PFL benefits.
ShaunaOkay. Can you give us one more bill that you think is important for employers to be aware of going into the new year?
MeaganWell, yeah. So, California employers will be required to replace two posters in the new year. Effective January 1st, there’s a new posting requirement with respect to the worker’s compensation notice, which essentially adds language regarding the applicant’s right to an attorney and explains how those attorneys’ fees will be paid. A new posting requirement for the notice also describes employee rights and responsibilities under the current Whistleblower Act. Starting January 1, 2025, employers will be required to post the specific notice that’s been drafted by the labor commissioner outlining these rights and responsibilities. Employers should work to obtain the worker’s compensation notice from their worker’s compensation carrier and then monitor the labor commissioners’ website for its publication of the new rights and Responsibilities notice.
ShaunaWell, thanks, Megan. I appreciate the updates on those items. And please subscribe to our blog, www.thelelawblog.com, for updates on this and other recent California changes in the law and other employment law topics. Thanks for watching this episode of the California Implement News.
Big changes for CA healthcare workers! New minimum wage rates are in effect, with increases rolling out as of October 16, 2024. Weintraub attorneys Nikki Mahmoudi and Jacqueline Simonovich make sure you’re up to date with the change on the latest episode of California Employment News.
Watch this episode on the Weintraub YouTube channel.
Show Notes:Nikki Mahmoudi:Hi, everyone. Thank you for joining us for this installment of California Employment News, an informative video and podcast resource offered by the labor and employment group here at Weintraub Tobin. My name is Nikki and I’m an associate in the firm’s labor and employment group. And today I’m joined by my fellow associate, Jackie Simonovich. So, a few weeks ago on October 29th, we had our CEN talking about minimum wage increases for 2025. Today we’re going to talk about the healthcare minimum wage that went into effect on October 16, 2024. Jackie, could you please start us off?
Jacqueline Simonovich:Yeah, thanks, Nikki. So recently, legislation was enacted that increased the minimum wage for workers of certain healthcare employers. And this increase went into effect on October 16, 2024. So to receive this increase, workers must meet two criteria. First, they have to work for certain healthcare facilities as those are defined in the new law, and they have to provide healthcare services or provide services supporting the provision of healthcare. Now, healthcare facilities are defined in the law to include hospitals and hospital systems, care and residential settings, physicians groups, county mental health facilities, county correctional facilities or jails, mental health rehabilitation centers, outpatient clinics and clinics providing primary care. And the law provides specific definitions for each of those facilities as well. One important thing to note is that any healthcare worker providing services for a healthcare facility owned, controlled or operated by the state of California is not entitled to the minimum wage increase. However, healthcare workers providing services for a political subdivision of California, so that’s a county, a municipality, municipality, a healthcare district, or the University of California system are covered by the law, so they can get the minimum wage increase. So the second criteria for workers to qualify for the minimum wage increase is that they have to provide healthcare services or services supporting the provision of healthcare.
What does this mean? Well, these are patient care related services, and they include services you might immediately associate with patient care, like nursing, caregiving services provided by medical residents, and other technical services, and then also services you might not immediately associate with patient care, like janitorial work, housekeeping, groundskeeping, guard duties, office work, food services, laundry, medical coding and billing, call center work, warehouse work, scheduling, and even working in a hospital gift shop. So, Nikki, what exactly is the minimum wage increase?
Nikki Mahmoudi:Yeah, let’s get into that. So the amount of the minimum wage increase varies across the different facilities and will increase in phases with the first phase starting on October 16, 2024. Some examples of this wage schedule are, for instance, with hospital or integrated health systems with 10,000 or more full time employees, and that includes skilled nursing facilities operated by those employers. The Minimum wage schedule would be as follows. So from October 16, 2024 to June 30, 2025, it would be $23 an hour. Then from July 1, 2025 to June 30th, 2026, it would be $24 an hour. From July 1, 2026 to December 31, 2027, it would be $25 an hour. And then starting January 1, 2028, it would be adjusted for inflation each year. Similarly, with intermittent clinics, community clinics, rural health clinics, or urgent care clinics associated with community or rural health clinics, the minimum wage schedule would be again from October 16, 2024 to this time, June 30, 2026, it would be $21 an hour. From July 1, 2026 to June 30, 2027, it would be $22 an hour. From July 1, 27 to December 31, 2028, it would be $25 an hour.
And then from January 1, 2029, it would be adjusted for inflation each year. And those are just two of the examples. There’s definitely more. A few other things we wanted to note is that certain covered employers may qualify for a waiver in the form of a 12 month delay in schedule of the healthcare minimum wage requirements. In order to obtain that waiver, a covered healthcare facility must demonstrate at the time of the waiver application that’s submitted that it meets certain criteria. And that includes providing financial documents and a declaration verifying the contents of the documents contained in the waiver requests are true and correct. Another thing to keep in mind is that the minimum wage increase impacts salaried workers. To qualify as an exempt employee for wage and hour purposes, the salaried employee has to receive a salary of at least 1 1/2 times the new healthcare worker minimum wage or two times the state minimum wage, whichever is greater, and then of course meet other specific duty requirements. The third thing to keep in mind is if you’re covered by the new law as an employer, you have to post a notice to employees of that change in minimum wage.
We’ll include below a link to the supplement as well as the California Department of Industrial Relations FAQ on the new health care worker minimum wage for resources. The fourth thing you want to keep in mind is you have the health care worker minimum wage increase. How does that impact with a local minimum wage law? And really with that is you want to go with the higher number, right? So if a city or a county has a higher general minimum wage, the covered healthcare facility must pay the higher minimum wage. Lastly, this is really just a brief overview of the minimum wage increase. It’s important to work with your employment lawyer to ensure compliance and make sure to, you know, review and revise any policies as needed.
- FAQ: Health Care Worker Minimum Wage Frequently Asked Questions (As of November 12, 2024, Last Updated by the DIR in October 2024)
- Supplement: California Minimum Wage MW-2023
Jacqueline Simonovich:Thanks, Nikki. And that’s it for now. Thank you for joining us on this episode of CEN. And you can continue to find our video series and podcasts through the lelawblog.com or on the Weintraub Tobin YouTube channel. We look forward to reconnecting with the next edition of California Employment News.
Another year is drawing closer, and with it comes another minimum wage increase for California. Nikki Mahmoudi and Tomiwa Aina review the expected minimum wage increases for 2025 in this episode of California Employment News.
Watch this episode on the Weintraub YouTube channel.
Show Notes:Nikki:Hi, everyone. Thank you for joining us for this installment of California Employment News, an informative video and podcast resource offered by the Labor and Employment Group here at Weintraub Tobin. My name is Nikki Mahmoudi, and I’m an associate in the group, and I’m joined by my fellow associate, Tomiwa Aina. So another year has come by with another minimum wage increase. So today we’re going to be talking about the minimum wage increases seeing for 2025 so far. As of January 1, 2025, California’s minimum wage will increase from $16 an hour to $16.50. The reason for this being is once the state minimum wage hit $15 an hour, the minimum wage rate has been adjusted annually for inflation based on the National Consumer Price Index for urban wage earners and clinical workers. A few things to note with that is the minimum wage cannot be lowered even if there’s a negative consumer price index. At the same time, the highest raise allowed in any one year is 3.5%. Another thing you want to keep in mind is sometimes, let’s say a jurisdiction is going to have a higher wage than the state minimum wage. We want to go with that higher minimum wage number. Additionally, certain industries may also have a higher minimum wage. Tomiwa, could you tell me more about examples where we’re seeing that higher minimum wage?
Tomiwa:Of course, Nikki. As of July 1, 2024, certain localities have increased their minimum wage. For example, in Alameda, it was increased to $17 per hour. Emeryville increased their minimum wage to $19 and 36 cents per hour. Santa Monica increased it to $17.27 per hour, and San Francisco increased it to $18.67 per hour. There are also minimum wages that are specific to industries. For example, there is a higher minimum wage for certain fast food workers that’s been effective as of April 1, 2024, and that requires them to be paid at least $20 per hour. Then as of October 16, 2024, certain healthcare workers are going to be eligible to receive a higher minimum wage compared to the state minimum wage. You can expect a CEN episode dedicated just to that increase. Thank you very much all. That’s it for now. You can continue to find our video series and podcast through the LElawblog.com or on Weintraub Tobin’s YouTube channel. Thank you everyone for joining us, and we look forward to reconnecting with you with the next edition of California Employment News.
It is election season, and that means employees might need to take time off work to vote. Nikki Mahmoudi and Tomiwa Aina give a quick review of California’s voting leave law as it applies to businesses in this episode of California Employment News.
Watch this episode on the Weintraub YouTube channel.
Show Notes:Tomiwa:Hello, everyone. Thank you so much for joining us today for this installment of the California Employment News, an informative video and podcast resource offered by the Labor and Employment Group at Weintraub, Tobin. My name is Tomiwa Aina, an associate in the Firm’s Labor and Employment Group, and today I am joined with my colleague, Nikki Mahmoudi. Now, as election season has started, we thought it would be a good idea to discuss California’s voting leave law as it applies to your businesses. So federal law does not require employers to provide any voting leave to its employees. However, California employees eligible to vote in any statewide or national election may request leave to vote if they do not already have enough time outside of their working hours to do so. Nikki, do you think you can tell us a little bit about whether voting leave in California is paid or unpaid and the notice that employers must give to their employees?
Nikki:Of course. In California, employees are allowed to take as much time as needed to vote. Employees are allowed to take up to 2 hours of voting leave as paid leave. Any remaining leave time will be unpaid. An employee may take voting leave at either the beginning or the end of their regular work shift, whichever will give the employee the most time to vote and the least amount of time away from work. Also, at least 10 days before every statewide election, implementation, employers must conspicuously post a notice in their workplace or where it can be seen by employees, setting forth California’s voting leave provisions in the California Election Code.
Tomiwa:Thank you very much, Nikki. Now, a lot of individuals vote before election day in California. However, if by the third working day before election day, an employee knows or believes that they will need time off to vote on election day, then the employee must notify the employer for at least two working days in advance that they will need time off to vote on election day. But some good news for employers, California law does not require employers to provide voting leave for elections other than statewide elections, such as municipal or county elections. So employers will not have to provide vote and leave for local elections.
Nikki:Thanks, Tomiwa. Well, that’s it for now. You can continue to find our video series and podcast through the LElawblog.com or on the Weintraub Tobin YouTube channel. Thank you everyone for joining us, and we look forward to reconnecting with you on our next episode.
Are you reimbursing employees for business expenses? Weintraub attorneys Meagan Bainbridge and Nikki Mahmoudi discuss key reimbursement policies under California law, including cell phone use and mileage for business travel in this episode of California Employment News.
Watch this episode on the Weintraub YouTube channel.
Show Notes:
Meagan:Hello, everyone. Thank you for joining us for this installment of California Employment News, an informative video and podcast resource offered by the Labor and Employment Group at Weintraub Tobin. My name is Meagan Bainbridge, and I’m a shareholder in the firm’s Labor and Employment Group. Today, I’m joined by my colleague, Nikki, and we’re discussing reimbursement of business expenses, particularly cell phone reimbursement and business travel mileage. So, Nikki, why don’t you start us off?
Nikki:Of course. So Under Labor Code Section 2802, employers must reimburse employees for all necessary expenses and/or losses incurred in the course and scope of their employment. Now, this requirement is interpreted quite broadly by the courts because California law and public policy favor protecting employees from employers passing on operating costs onto those employees. Two of the biggest areas involving business reimbursement are cell phone reimbursement and gas mileage. When it comes to cell phone reimbursement, an employer must reimburse an employee if the employee is required to use a personal cell phone to make work-related calls. This is the case even when an employee is technically not incurring an extra expense by making those work calls because, let’s say, they have an unlimited data plan. Courts have found that the employer must pay some reasonable percentage of that cell phone bill to comply with the labor code, but there’s not a whole lot of guidance on what that necessarily means. We can say that where the employee is paying a fixed amount for their cell phone use, the employer must reimburse the employee for the percentage of the cell phone bill that can be attributed to the employee’s mandatory use of the cell phone for work-related purposes.
Meagan, could you tell us a bit about reimbursing employees for mileage? Of course.
Meagan:The requirement to reimburse employees includes all work-related travel and mileage when an employee uses their personal car for work-related business. Of course, if they rent a car or travel by plane or train, that’s also reimbursed for the cost. But here, we’re focusing on when the personal car is used. Note, travel from home to work is usually not compensable, but most other travel time will be considered work time, and employees should be reimbursed for both, of course, their time that is spent in the car, but also for the mileage that is used. The IRS rate, which we’ve listed in the link below, is considered the most reasonable reimbursement rate by California state agencies. Currently, the rate in for self-employed and business use is 67 cents per mile. Of course, employers may reimburse employees for mileage at or below the IRS rate as long as the chosen rate covers all actual expenses incurred, both the mileage itself and for gas and the wear and tear on the vehicle. What you may want to keep in mind if you’re using anything beyond the IRS rate is that anything beyond it might be taxable as wages if the chosen rate exceeds actual expenses.
Similarly, if an employer uses a lower mileage rate than the IRS debate, then the employer must show that that rate sufficiently reimburses its employees for all their actual expenses. Utilizing the IRS’s rate, which is presumed to be reasonable, can make an employer’s life just a bit easier rather than having to calculate the actual expenses incurred by the employee.
Nikki:Thank you, Meagan. That’s it for now. As a note, this is not meant to be an all-inclusive list of what an employer must reimburse an employee for. As we mentioned at the beginning of this video, employers must reimburse employees for all necessary expenses and/or losses incurred in the course and scope of their employment. Mileage and cell phone reimbursement are just the two biggest ones we see. Thanks for joining us on this episode of California Employment News. You can continue to find our video series and podcast through the lelawblog.com or on the Weintraub Tobin YouTube channel. We look forward to reconnecting with you on our next episode. Thank you.
Meagan Bainbridge and Ryan Abernethy break down reasonable accommodations under the ADA and FEHA. Learn what employers need to know about handling requests and engaging in the interactive process in this installment of California Employment News.
Watch this episode on the Weintraub YouTube channel.
Show Notes:Meagan:Hello, everyone. Thank you for joining us for this installment of the California Employment News, an informative video and podcast resource offered by the Labor and Employment Group at Weintraub Tobin. My name is Megan Bainbridge, and I’m a shareholder in the firm’s Labor and Employment Group, and today I’m joined by my partner, Ryan Abernethy. A few months ago, Ryan and I spoke to you about the various leave laws that California employers need to be aware of, namely the Federal Family Medical Leave Act and California’s Family Rights Act. Today, we want to delve into a related but separate issue, reasonable accommodations. Ryan, why don’t you start us off with a review of the ADA and what it tells us about reasonable accommodations?
Ryan:Sure. Well, thanks, Megan. We often tell our clients that employee medical leave requests are one of the most complex issues California employers face. This is because even if an employee doesn’t qualify for FMLA, CFRA, PDL leave, or workers’ compensation, or their leave under those statuses has already expired, employers may still be legally required to reasonably accommodate additional medical leave requests under the Americans with Disabilities Act or the ADA, or a California’s equivalent of the ADA, which is called the Fair Employment Housing Act or the FHA. We’ll refer to the ADA and FHA interchangeably today to the extent they cross over. The ADA and FHA don’t just apply to employees’ medical leave requests. Under these statutes, Companies with as few as five or more employees are required to provide any and all reasonable accommodations for their employees with a physical or mental disability to apply for jobs or to perform the essential functions of their jobs unless it would cause undue hardship to the company. Employers also have a duty to engage in what’s called the interactive process with their employees, which is basically to explore what accommodations may be provided. A reasonable accommodation could include virtually anything, such as changing an employee’s job duties, relocating their work areas, or providing mechanical or electrical aids to the employees of disabilities.
Megan will cover this in greater detail momentarily. It’s always good to know what the costs are for non-compliance with some of these statutes, and non-compliance with the ADA can actually be very hefty. Employers who violate the ADA can be sued by their employees and required to pay employees past and future lost earnings, their pain and suffering, and punitive damages, as well as their attorney’s fees. So Megan, why don’t you tell us some more about the ADA?
Meagan:Yeah. So first, it’s important to understand that each request for a reasonable accommodation must be considered on a case-by-case basis. That means that the employee or applicant and employer must work together to determine whether there’s a solution that might allow the employee or applicant to perform the essential functions of their job duties. There is no one-size-fits-all solution to these discussions. That said, the first step is likely that an employee or applicant discloses a disability or the employer otherwise gains knowledge of a potential disability. While employers shouldn’t focus too much on what qualifies as a disability, this generally means that the employee has a physical or mental impairment that substantially limits one or more major life activity. Employers should seek to verify medical condition meets the ADA general definition of a disability and what restrictions pertains to the employee through a medical certification. Next, the employer and employee should engage in a dialog to determine what modifications or adjustments to the work environment will enable that applicant or employee with a disability to participate in the application process or to perform the essential job functions. This is what’s generally known as the interactive process, and it could include many things, as Ryan just mentioned.
It could include buying equipment to accommodate a disability or increase accessibility to a computer or the workplace or something along those lines. It could include job restructuring or other alterations to a work schedule such as part-time work, remote work, that thing. It could include an unpaid leave of absence. It could include reassignment to a vacate position. It could include a wide array of things that employers should consider. As Ryan mentioned, employers have a duty to provide these reasonable accommodations unless doing so would impose an undue hardship. This means that the company would experience significant difficulty or expense by making the appropriate accommodations. Some important factors that consider this determination are the true cost of the accommodations that have been requested to be provided and the size of the business, such as the number of employees or its financial resources. Larger companies are going to be expected to provide more of an expense than some smaller employers might be required. It’s going to depend on how the business is structured and what type of work the company performs. All of these resources have to be considered, and then a determination is made whether the accommodation request is actually an undue burden.
Finally, it’s a frequent assumption that once an accommodation is granted, it’s permanent. However, because the reasonable accommodation process is interactive, it can evolve home even after the approval stage and is subject to review or change at any point. The accommodation may have been tied to a temporary medical need and, therefore, expired. The medical needs of the employer applicant may change, or the accommodation may not work as intended. In any case, the employee and the employer should once again engage in the interactive process to review alternatives when the need arises. Ryan, what tips do you have for employers who are engaging in the interactive process?
Ryan:There are actually several steps employers can take to ensure that they’re meeting the interactive process obligations. The first common one we see is that employers are often unaware of what might trigger their requirement to engage in the interactive process. This usually follows an actual employee request for a validation. But it could also be triggered by a supervisor noticing that an employee is having difficulty performing essential job functions or meeting performance goals due to an apparent medical condition. Second, employer should keep documentation validation of all discussions with the employee made during the interactive process. When discussions stop, employer should make sure to document if the ball was in the employee’s court and that they stopped communicating or how the employee’s demand was found to be unreasonable by the company. Third, since the interactive process revolves around whether the employee can perform the essential functions of his or her job, the employee should have a pre-existing document that contains a list of all the employee’s essential job functions. Otherwise, Otherwise, it could appear that the employer is manufacturing nonexistent duties after the fact. So essential duties can include anything from the specific amount of weight that an employee is required to carry to how long the employee is expected to sit or stand.
It’s also important to include whether in-person attendance is required since medical accommodation requests often include a request by employees to work remotely from home.
Meagan:Those are great tips, Ryan. Thanks. And that does it for today. Thank you for joining us. You can continue to find News on our blog at www.thelelawblog.com and wherever you listen to your favorite podcast. We’ll see you next time.
A recent Texas federal court ruling has put a halt on the enforcement of the FTC’s ban on non-compete agreements. Learn more about this ruling and the implications it has for employers from Shauna Correia and Jacqueline Simonovich as they give an update from their previous episode in this installment of California Employment News.
Watch this episode on the Weintraub YouTube channel.
Show Notes:Jackie:Hi, I’m Jackie Simonovich, and I’m here with partner Shauna Correia. In our last California Employment News episode, Understanding the FTC Non-Competed Ban: Key Insights for Employers, we mentioned that in a Texas case, Ryan LLC versus Federal Trade Commission, the Court was going to issue a decision in late August. Well, the Court made that decision on August 20th, and it invalidated FTC Rule banning most non-compete agreements. Shauna, can you remind us why this is good news for employers?
Shauna:Yeah. As just a brief recap, the FTC Non-Compete Rule would have imposed a broad nationwide ban on most forms of non-competition agreements. Most employers would have been subject to the rule, and there were only a few narrow exceptions that we talked about in our last episode. But what the rule would have done would have taken away a significant tool that entities and individuals have used in the past in the form of covenants not to compete that were used to protect their intellectual property from having their former independent contractors or employees go off instead to competing businesses after their engagement or employment ended. So, Jackie, can you explain more about how the Ryan LLC decision has changed the landscape once again?
Jackie:Sure. Well, in Ryan, the court first issued a preliminary injunction, but that only applied to the parties in the case. Then both parties filed motions for summary judgment, and the court granted Ryan’s motion, and it denied the FTC’s motion. In a lawsuit, when the court grants a motion for summary judgment, that ends the case, meaning Ryan won this lawsuit. When the court granted Ryan’s motion, it found that the FTC had exceeded its authority when it made the rule. It said the FTC could prevent entities from using unfair methods of competition, but it couldn’t make substantive rules as it had to prohibit those unfair methods of competition. Shauna, can you explain what happens now?
Shauna:The rule would have made an effect on September 4th, but now because of this decision, the FTC will not be able to put it into effect or enforce this rule anywhere in the United States. The FTC still can, as you mentioned, use other ways prevent unfair methods of competition, but this rule will not apply. The FTC also still can appeal the Ryan decision, and ultimately, it’s likely that the Supreme Court may end up deciding this issue because of the circuit split that we talked about the last time. But right now, the FTC rule is effectively dead on arrival. That’s all the time we have for today, but please visit our website at www.thelelawblog.com, where you can view more episodes of the California Employment News, and subscribe to our blog for updates on this and other hot topics. Thanks.
The FTC’s new rule banning non-compete clauses will take effect on September 4th and impact all workers, including contractors and interns. Weintraub attorneys Jacqueline Simonovich and Shauna Correia discuss the pending legal challenges and how the outcome could reach the Supreme Court in the latest installment of California Employment News.
Watch this episode on the Weintraub YouTube channel and listen to this podcast episode here.
Show Notes:Jackie Hi, I’m Jackie Simonovich, an attorney at Weintraub Tobin, and I’m joined today by my colleague, Shauna Correia. Today, we’re discussing the latest on the FTC Non-Competent Rule. The Federal Trade Commission published its final rule on May 7th, which is slated to go into effect September 4th, pending the outcome of a few legal challenges that we’ll talk about later. Shauna, can you give Can you give us some background on the FTC final rule?
Shauna Sure. California employers are already familiar with state laws prohibiting post-implement non-competition clauses in employment contracts, but even California employers should pay attention because this new rule, if it goes into effect, is broader. First, the rule will prohibit employers from imposing non-competes on all workers, and that is including not just employees, but other workers like independent contractors, interns and volunteers, whether paid or unpaid. And under the rule as defined by the FTC, any type of provision that would function to prevent or penalize or prohibit a worker from seeking an employment or working after leaving the relationship with the current company would be banned. And unlike in California, there’s no carve out specifically for protection of trade secrets. The agency’s rationale for this is that other state and federal laws exist to protect trade secrets and will continue to be enforceable. Jackie, do you want to cover the two exceptions that there are to the new FTC rule?
Jackie Sure. Existing non-competes with senior executives can remain enforced, but the term senior executive is defined narrowly. It’s a worker who earns, and this is a very exact number, more than $151,164 and is in a policy-making position. The FTC estimates this to be less than 1% of all workers, and the rule would still prohibit new non-competes with senior executives moving forward. The second exception is non-competes in connection with a worker’s sale of a business interest. Although the rule covers most employers, there are also some employers who will not be covered, and those are employers who are exempt from the FTC’s jurisdiction. Those are financial institutions, some nonprofits, and air carriers. Now, because the FTC rule is federal, it will supersede all contrary state laws. And Shauna, how does this affect California employers?
Shauna Well, so typically federal law provides the floor, and then California comes in with laws that are more protective and more stringent, and that’s what states are permitted to do. That’s pretty typical. But in this case, California law already exists, but the FTC rule is coming in, and in some ways, it’s even more restrictive than state law because it applies, as we talked about, to workers other than employees, for example. So people who are in California are going to be required to comply with both the federal and state law. So for example, in California, the exception for sale of a business is not as broad as the FTC rule, but because it’s more restrictive, the sale of a business exceptions in California will still be subject to those same limitations that already exist. Another note is that in California, there is no exception for senior executive non-competes. So nothing would change with respect to already unlawful or unenforceable non-competes. They’d still be unenforceable even for senior executives because they were unenforceable before the FTC rule came into effect. One difference is, again, that the FTC rule has no express carve out for protection of trade secret information. Because the FTC’s definition of a non-competent clause is very broad, there’s a concern for California employers who are currently relying on contract provisions, for example, protection of confidentiality of information, customer non-solicitation clauses as a contractual means of protecting their trade secrets, including customer lists, they may need to evaluate and reevaluate those provisions. Employers, even in California, are encouraged to talk with their employment attorneys to make sure existing NDAs, confidentiality provisions, and those sorts of provisions are sufficiently narrowly drawn to restrict just the unauthorized use and disclosure of trade secrets without running afoul of the FTC’s ban. Jackie, you mentioned at the outset that there are some legal challenges pending. Can you talk a little bit about the cases working their way through the federal courts?
Jackie Several lawsuits were brought to challenge the FTC role, two in Texas, one in Pennsylvania, and one in Florida. In the Texas case, the court granted the plaintiff’s preliminary injunction, which stays enforcement of the rule, but only as to the plaintiffs in that case. The court has said that it will rule on the merits of the case by the end of August, and that ruling is expected to result in a nationwide injunction of the FTC role. That will apply to businesses beyond the plaintiffs in that case. In the Pennsylvania case, the court issued a rather surprising ruling on July 23rd. It declined to issue the plaintiff’s preliminary injunction, and it also stated that the plaintiffs were unlikely to prevail on the merits of the case because it said that the FTC did have the power to promulgate the non-competent ban. Right now, the FTC rule is set to go into effect in less than a month on September 4th, but we’re still awaiting the decisions from the Texas Court and from the other cases I mentioned. We’re also seeing a circuit split, so this issue could likely be decided by the Supreme Court.
Shauna: Thanks, Jackie. I think we should expect to see both cases go up on appeal to the third and fifth circuit courts. But for now, we’ll just watch and wait for the Texas Court to issue its decision later this month. That’s all the time we have for right now, ut if you subscribe to Alerts for “California Employment News,” you’ll be first to know about updates on this and other hot employment law topics. You can also check out our blog at www.thelelawblog.com. Thanks. Social The FTC’s new rule banning non-compete clauses will take effect on September 4th and impact all workers, including contractors and interns. Weintraub attorneys Jackie Simonovich and Shauna Correia discuss the pending legal challenges and how the outcome could reach the Supreme Court in the latest installment of California Employment News.
Employee personnel files are an important aspect of any employer’s records. Meagan Bainbridge and Nikki Mahmoudi review the basics of employee personnel files, including what should and should not be included and handling inspection requests, in this featured episode of California Employment News.
Watch this episode on the Weintraub YouTube channel and listen to this podcast episode here.
Show Notes:
MeaganHello, everyone. Thank you for joining us for this installment of “California Employment News”, an informative video and podcast resource offered by the labor and employment group at Weintraub Tobin. My name is Meagan Bainbridge, and I’m a shareholder in the firm’s labor and employment group. Today I’m joined by my colleague Nikki Mahmoudi, and we will be discussing personnel files and more importantly, what should and should not be included in an employee’s personnel file. Nikki, why don’t you start off with describing what labor codes section 1198.5 tells us about personnel files?
NikkiOf course. So, the labor code section provides that current and former employees or a representative have the right to inspect and receive a copy of the personnel filing records relating to the employee’s performance or to any grievance concerning the employee. Now, the key here is it has to be a written request. So categories of records that are generally considered to be personnel records, they’re typically those that are used or have been used to determine an employee’s qualifications for promotion, additional compensation, disciplinary action, including termination. So some examples of these records include hiring records, payroll authorization forms, notices, accommodation warning, discipline, termination, notices of layoff, leave of absence and vacation, notices of wage attachment or garnishment, education and training notices and records, performance appraisals or reviews, and attendance records. Now, there’s some records that the right to inspect personnel records and files does not apply to. So these are records relating to the investigation of a possible criminal offense, letters of reference or ratings, reports or records that were one obtained prior to the employee’s employment, two were prepared by identifiable examination committee member or three obtained in connection with a promotional exam. Megan, are there any other tips that you have for the process of providing these records or copying these records?
MeaganThanks, Nikki. Well, the code provides that employers should maintain a copy of personnel records for a period of three years after termination. Per new legislation in 2022, employers should now maintain a copy of personnel records for a period of no less than four years from the date of termination of an employee or a nonhier of an applicant, and possibly even longer where employees or applicants have filed some sort of complaint alleging wrongdoing of some kind. If there is such a complaint, best practice would be to just maintain their personal record till the conclusion of that action. Employers should also remember that they must make their records available for inspections to both employees and former employees. These inspections must be allowed at a reasonable time and at a reasonable interview, but in most cases, no later than 30 calendar days from the date an employee makes the written request. Additionally, if requested by the employee or the employee’s representative, the inspection must be permitted at a place where the employee reports to work or at another location agreeable to the parties. Former employees, however, may inspect their records at the location where the employee stores those records, unless the parties agree to a different place in writing.
Copies of personnel records may also be provided by mail at the employee’s cost. Finally, while an employer is not required to make an employee’s personnel file available during the employee’s regular working hours, no loss of compensation to the employee should be permitted under any circumstances. Nikki, are there any limits to how often an employer has to comply with these kinds of requests?
NikkiYes, there are. So when it comes to former employees, an employer is required to comply with only one request per year. When it comes to representatives of the employees, an employer is not required to comply with more than 50 requests to inspect or receive a copy of personnel files filed by representative or representative employees in one calendar month. When it comes to current employees, we talk about how these inspections can happen within a reasonable interval, and typically that would be once every year. But there are some exceptions to this. Let’s say if there’s reasonable cause to believe that the file has been altered in a manner that might adversely affect the interest of the employee, or the file contains information pertinent to an ongoing investigation affecting the employee. One other thing to keep in mind is it is very important that employers comply with these requests. If an employer fails to either allow for the inspection or provide copies of these records with the times specified or times agreed to by mutual agreement, then employee or the labor commissioner may recover a penalty of $750 from the employer. Another thing that can happen is employees could also bring in action for injunctive relief to obtain compliance and potentially recover costs and reasonable attorney fees, which we want to avoid.
MeaganThanks, Nikki. And that does it for today. Thank you for joining us. You can continue to find the “California Employment News” on our blog at the www.lelawblog.com or wherever you listen to your favorite podcast. We’ll see you next time.
Weintraub attorneys Shauna Correia and Lukas Clary as they discuss the new PAGA reform, offering insights on how it impacts California employers and steps they can take to stay compliant in the latest episode of “California Employment News.” Watch this episode on the Weintraub YouTube channel and listen to this podcast episode here.
Show Notes:ShaunaHi, thank you for joining us for this installment of the “California Employment News”, an informative video and podcast resource offered by the Labor and Employment Group at Weintraub Tobin. I’m Shauna Correia, and I’m joined today by my partner, Lukas Clary, and today we’re here to discuss the new Private Attorney General Act or PAGA reform. Lukas, can you start us off by giving a little bit of background about the PAGA?
LukasYeah, thanks, Shauna. PAGA is the Private Attorneys General Act. It’s a California statute that allows employees to step into the shoes of the government effectively as private attorneys general to enforce labor laws and seek penalties for violations of the California Labor Code. These can be brought on behalf of not only the aggrieved employee who is bringing it but as representative actions on behalf of other employees and the state itself. While just about any violation of the labor code could give rise to a PAGA lawsuit, the ones we most commonly see range from wage-related violations such as non-compliant overtime practices and missed meal and rest breaks to more minor things like paycheck the employer’s address or legal name is missing from the paycheck, or the last four digits of the employee’s social security number or a similar ID is missing. Regardless of what the error is, the existing penalties are fairly uniform. $100 per employee per pay period for initial violations and $200 per employee per pay period for subsequent violations. While that might not seem like a huge amount, when you multiply it across the workforce and across the one-year statutory lookback period that applies to these lawsuits, PAGA lawsuits can often add up to well into the six figures and sometimes even seven figures in liability or more, plus your own legal fees. While this was enacted with good intentions back in 2004, in practice, PAGA has been a bit of a nightmare for California employers. In the overwhelming majority of these lawsuits, the alleged violations at issue did not occur because a malicious employer was trying to skirt the rules. Instead, particularly with technical violations such as missing information on the wage saving, employers typically do not even realize they were out of compliance until litigation is underway. And by that point, it’s too late. With very limited exceptions, existing law has not allowed employers to cure the violations and avoid the penalties. These lawsuits have sometimes presented an existential crisis for employers who did not even realize they were doing anything wrong. And the way the law has been structured, 75% of all recovered PAGA penalties are turned over to the state, with the remaining 25% going to the employee. Plaintiffs’ lawyers also take a cut of the employee’s recovery before it is turned over to them. That can be anywhere from 25 to 35% of the amount. In the end, despite substantial liability to the employer, each degree of employee does not see much of the recovery at all. For years, employers have been trying to get PAGA of reform and have had just about no luck. One last-ditch effort at reform in the form of a measure on the ballot this coming November seemed to offer some promise, but with no guarantees it would pass. Enter the California legislature and an 11th-hour bill in place of this ballot measure. Shauna, why don’t you tell about the bill?
ShaunaYeah, so the new PAGA reforms bills were meant to redress concerns that the act was being abused with, as you said, small business owners facing unreasonably large penalties or paying huge settlements for minor technical or isolated violations of the labor code. The major amendments to the PAGA alter the standing requirements for employees to bring a suit against their employer and revamp the penalty system. The original law allowed for employees to bring a civil action against their employers on behalf of themselves and other current and past and potentially future employees for any and all labor code violations, even if the employee bringing the case only suffered one type of violation, such as they didn’t receive a meal period premium. They could bring a PAGA claim for all sorts of different labor code violations. Now, only employees who personally suffered each of the alleged violations within the relevant statute of limitations will be able to bring a civil suit against their employer for those types of claims. Now, employees can still file a civil suit on behalf of other aggrieved employees, but only if they also suffered a violation of the same labor code provision. The revisions to the PAGA’s statute also changed the existing penalty system. The revisions also change the existing penalty system. While the original penalty of $100 per aggrieved employee per pay period still applies, the penalties now can be modified depending on prior employer conduct or the amount of harm. If the alleged violation just resulted from an isolated and non-recurring event, the civil penalty will be reduced to $50. Now, penalties will also be reduced for basic wage statement violations like you mentioned. Rather than the $100 penalty, it’s reduced to $25 for these certain types of technicalities that are wage statement violations that didn’t really cause harm. The new law also incentivizes proactive employer compliance. If the employer, prior to receiving a PAGA notice, had been taking reasonable steps to comply with the labor code, such as doing audits, having compliant policies, and giving training, then the civil penalties will be capped at 15% of what they might have otherwise been fined. Then the penalties would also be capped at 30% if the employer takes reasonable steps to comply after they’ve gotten a PAGA notice within 60 days. If the employer takes reasonable steps to be compliant and they cure any violations, then the employer will not have to pay any PAGA penalties. And likewise, if the employer found not to take reasonable steps in advance but still goes and cures the violation after they get the notice, then the PAGA penalty will be limited to $15 per pay period. So as you can see, it’s a substantial reduction in potential penalties that could be recovered if the employer makes efforts to comply with the labor code. These changes, however, are not going to apply to PAGA lawsuits that are already pending as of June 19. They’ll only be for future lawsuits that are filed afterward. As you can see, the PAGA reforms are not going to entirely eliminate all PAGA lawsuits or the frivolous ones that really only benefit plaintiffs’ attorneys and put money in the state’s pockets and not in the employee’s pockets. But I think it’s a step in the right direction.
ShaunaLukas, do you have any suggestions for what employers might want to do in response to these changes?
Lukas,Yes, definitely, so look, with everything that you just summarized, Shauna, all in all, this is a very good thing and a rare victory for California employers. But as you said, that does not mean employers should let their guard down. PAGA has been reformed, it has not gone away. We still expect to see lots of PAGA lawsuits filed, and we still expect to see litigation that will be necessary to answer some of the questions that the new law raises. Also, as Shauna just said, employers currently who are currently engaged in PAGA or who have already received letters alleging PAGA violations will not be afforded the relief of this new bill because it is not retroactive. It’s only for things filed after June 19, 2024. So what employers should do is you should still be diligent in ensuring that your wage and hour practices are compliant, particularly around meal and rest breaks, overtime, and payroll practices, which are the most common things that give rise to PAGA lawsuits. Employers should consider auditing their wage and hour practices, working with their legal counsel as necessary to identify and cure any issues to take advantage of that reduced liability that Shauna was talking about. Employers should also train supervisors, HR professionals, and payroll specialists on labor code compliance. Then if an employer does receive a pocket letter, should immediately take advantage of the cure period that Shauna, you were discussing by working with legal counsel to remedy any violations. All of these steps can help eliminate or at least mitigate potential pocket liability.
ShaunaThose are all really great tips, Lukas. And of course, we’re here to help employers with all of these tips. So feel free to contact us proactively. You can also continue to find installments of California Employment News on our blog at www.thelelawblog.com or wherever you listen to your favorite podcast. Thanks for joining. We’ll see you next time.
This week on “California Employment News,” Shauna Correia joins Entertainment attorney Scott Hervey on “The Briefing” to discuss the FTC’s recent final rule banning post-employment non-compete clauses and how it will affect non-scripted or reality television talent.
Watch this episode on the Weintraub YouTube channel here.
Show Notes:ShaunaHi, I’m Shauna Correia. This week on California Employment News, we’re featuring an episode of “The Briefing,” an entertainment and intellectual property podcast also produced by Weintraub Tobin. In this episode, I talk with “Briefing” host and fellow attorney Scott Hervey about the FTC’s recent final rule banning post-employment non-competent clauses. We discuss how it will impact non-scripted or reality television talent. We hope you’ll enjoy it. We’ll be back to update you on the legal challenges to the FTC rule that are currently working their way through the courts on another episode of California Employment News. Stay tuned.
ScottThe FTC recently issued a final rule banning post-employment non-compete clauses in agreements between employers and their workers. While this is causing consternation with the standard corporate GC set, in-house counsel of television networks that are heavy into non-scripted television are quietly expressing concern. Why? Well, post-term exclusivity provisions are huge in the non-scripted television industry, and they’re used to prevent non-scripted talent from jumping ship. I’m Scott Hervey from Weintraub Tobin, and today I’m joined by my partner, Shauna Correia. We’re going to talk about this FTC ban and how it will impact non-scripted talent deals on today’s installment of “The Briefing” by Weintraub Tobin.
Shauna, welcome to “The Briefing.”
ShaunaThanks for having me, Scott.
ScottOkay, so Shauna, why don’t you tell us what this ruling actually says?
ShaunaThis 540-page rule that the FTC came up with prohibits an employer from entering into or attempting to enter into any post-employment non-competent clause with a worker in the United States. The definition of worker is very broad. It applies to all-natural persons, so that’s direct and indirect relationships with employees and independent contractors. There are a couple of important but narrow exceptions. First, it does not apply to senior executives, which is defined as individuals making over $151,164 in annual compensation and are in a policy-making position for the company like a CEO or president, and the non-compete agreement was in place before the rule took effect. Second, it doesn’t apply in connection with a legitimate sale of a business. Third, it doesn’t apply to a small number of industries, which include nonprofits or specific industries like air carriers or ground transportation or banks that are not governed by the FTC but are regulated by some other governmental agency. But the vast majority of industries are covered by this.
ScottWhat about existing non-competes?
ShaunaIt’s important to note that this rule will not take effect for 120 days from today, May 7th. We have until September 4th before it becomes law. But assuming the rule takes effect, unless this worker is a senior executive, the rule as written will apply to retroactively ban enforcement of existing non-competes. Also, to note, if a cause of action for a breach of a valid non-compete has accrued prior to the effective date of the rule, that can still be enforced.
ScottCompanies that have non-competed agreements in place, they’re also required to send out a notice of non-enforcement, correct?
ShaunaRight. Employers are going to be required to send out a clear and conspicuous notice to all workers that have a non-competent provision in their contract, and the notice will have to tell the workers that the non-compete provisions will not and cannot be legally enforced.
ScottA company can’t satisfy this by, say, putting a notice on its website, can’t it?
ShaunaNo. The rule will require individualized communication, but it’s pretty open. It can be by email, mail, or even text message. I think the key is that you want to have proof that the notice went out. The FTC rule does provide model language that can be used.
ScottOkay. Well, now let’s talk about how this rule defines a non-competent clause and how that could impact what we normally see in participant agreements in non-scripted television.
ShaunaSure. The rule defines a non-competent clause as a term or condition of employment that prohibits a worker from, penalizes a worker for, or functions to prevent a worker from seeking or accepting work in the United States with a different person, where such work would begin after the conclusion of the employment, or two operating a business in the United States after the conclusion of the employment that includes this non-competent term or condition.
ScottThe rule makes it clear that it would ban the enforceability of other contract clauses that have the same effect as a non-competent clause. The FTC provided an illustration, an NDA between an employer and a worker, written so broadly that it effectively precludes the worker from working in the same field after the conclusion of the worker’s employment with that employer.
ShaunaCorrect. Unlike under California state law, it doesn’t specifically ban non-solicitation provisions, but a super broad NDA like the example you gave, or for example, a non-solicitation clause, could be invalidated because the rule bars any provision or policy that functions to prevent someone from competing once their job for the company is done.
ScottOkay, so let’s see how this could impact participant deals in non-scripted television. So generally, in contracts with principal talent or participants in a non-scripted program, there is an exclusivity clause that generally requires the talent to be exclusive to the producer or the network. When these provisions are challenged in negotiation, networks like to argue that on-air talent becomes well known because of the network’s investment and reputation and that the network must be able to use this exclusivity provision to protect this investment. The scope of exclusivity can be very broad. For example, as an on-camera performer in all media, that’s a scope of the exclusivity. Or it could be narrower as an on-camera performer in unscripted television. Depending on the leverage the talent has, the talent could negotiate some carve-out, such as allowing the talent to participate in other types of non-scripted television, such as competition shows or something that is different than the format of the program that they’re being hired, or they can negotiate to allow for internet programming, such as a YouTube series. Now, to get this would require some leverage, and that’s not something that most participants that aren’t already celebrities have. Most of the average participants in non-scriptive television would start out with a very broad exclusivity provision.
ShaunaThe language in the exclusivity provision ends up essentially prohibiting this type of competition post-term.
ScottThat’s right. The term of the exclusivity generally spans the period of time the producer has options on the talent services. So, generally, a talent agreement gives the producer the option to hire the talent back for subsequent seasons. Usually, it’s for five, six, or seven seasons. The option period language you usually see is something like 12 months from the initial airing of the previous season of the program.
ShaunaSo effectively, how long could that be?
ScottSo, let’s look at the time period after the camera stops rolling. From the end of principal photography until the time that the show actually airs, could be as long as 6 to 12 months. Then you have the run of that particular season, so that could be an additional 6 to 12 weeks, depending upon the number of episodes ordered to production. Then you have the option window, the 12-month span from the first airing of the last episode of that season. So effectively, that period could be as long as 20 months to two years plus. The commission specifically declined to provide an exclusion to the rule for on-air talent. So, it’s clear that the commission intended this rule to be applicable to persons who participate in programming on air. Do you believe such an exclusivity provision, the type that we just talked about, would be interpreted as a non-competent clause?
ShaunaYeah, I think so because, as you described it, it would be seen as prohibiting that on-air talent from effectively doing any other work during this time, which could be, like you said, 20 months to 2 years.
ScottWell, let’s get it clear: prohibit them from doing any other work as an on-camera talent. Most of the time, these participants do something else. They have some other job or skill or expertise that may have something to do with being on camera.
ShaunaYeah, I think, as written, this would be seen as prohibiting on-air talent from effectively doing other work for another employer during this time, at least as on-air talent.
ScottCurrently, there are some legal challenges to the rule. Let’s focus largely on the lack of statutory authority of the FTC to enact this type of rule. However, if the rule is upheld, I can see networks, maybe in an attempt to get around this prohibition, revising how on-camera talent is paid. Instead of paying the talent over the course of production, which is how they’re normally paid, I can see a network stretching the payment all the way out to the very last date when the vast majority of the talent’s work is performed and making the last payment due on the date that the producer’s option would have to be exercised. I could see networks arguing that this is an intern prohibition and not a post-term and thus it doesn’t fall under the FTC’s rule or isn’t prohibited by the FTC rule.
ShaunaYeah. As you mentioned, there are these legal challenges right now. The US Chamber of Commerce and two private entities have already filed suit to enjoin this law from being enforced, both on grounds that it’s retroactive, arbitrary, exceeds the bounds of the FTC’s authority delegated from Congress, constitutional grounds, you name it. We’ll have to see what happens there. But to your point, I agree with you, networks are going to get creative to achieve their goals, and there’s room for that. In fact, the FTC itself seems to suggest that what is traditionally known in the old labor as garden leave could work here, which would mean, though, talent being paid the same pay and benefits to stay on the payroll for the whole exclusivity period while really not doing any work. As you say, that may just end up meaning the network stretching the same dollars of pay over longer period of time. Or there’s other options, maybe really beefing up the nondisclosure provisions and things like that to prevent leaks of information about the show before it’s air and things like that.
ScottI think the network’s focus really is going to be locking in the talent to that particular network and not allowing them to do another show for another network. I can see a network stretching out the pay because they’re paid by the episode. They’re not paid by the week or by the month. Stretching out that pay and making the last payment due on the date that the producer’s option to pick up their services for next season would otherwise expire.
ShaunaYeah, and to be clear, nothing about the rule prohibits exclusivity provisions during employment. So, I would think that that would be viable.
ScottYeah, interesting, interesting. Okay, well, let’s keep track of this and see what happens. And if we start seeing networks revising the way in which non-scripted talent are paid, if this rule, in fact, comes into effect as law, then we’ll have another subject to talk about. But thanks for joining us today, Shauna.
ShaunaAll right. Thanks a lot.
ScottThanks for listening to this episode of The Briefing. We hope you enjoyed the episode. If you did, please remember to subscribe, leave us a review, and share this episode with your friends and colleagues. If you have any questions about the topics we covered today, please leave us a comment.
Meagan Bainbridge and Lukas Clary from Weintraub Tobin’s Labor and Employment Group dive into the California Supreme Court case Huerta vs. CSI Electrical Contractors. Discover the key takeaways for employers on what constitutes compensable work time for pre- and post-shift activities in this latest installment.
Watch this episode on the Weintraub YouTube channel here.
Show Notes:MeaganHello, everyone. Thank you for joining us for this installment of the “California Employment News,” an informative video and podcast resource offered by the Labor and Employment Group at Weintraub Tobin. My name is Megan Bainbridge, and I’m a shareholder in the firm’s Labor and Employment Group. today, I’m joined by my partner, Lukas Clary, to discuss a new case out of the California Supreme Court, Huerta versus CSI Electrical Contractors. Lukas, why Can you start us off with a brief background of the case?
LukasThanks, Megan. So, the Huerta case addresses the issue of whether California law requires employers to compensate employees for time spent on certain pre and post-shift tasks. We know that employees must be paid for all “hours worked.” We also know from the Industrial Wage Commission’s wage orders and various cases interpreting them that Hours worked generally means either of two things. One, time during which an employee is subject to the control of an employer, or two, time the employee is suffered or permitted to work, whether or not required to do so. Well, these may seem like clear rules. In practice, things can get a bit cloudier. What about things such as the time spent undergoing security checks after clocking out but before leaving the premises? Enter the Huerta case. In this case, the plaintiff, Fernando Huerta, worked as an electrician foreman for CSI Electrical Contractors. He alleged that CSI failed to compensate him and fellow employees for tasks performed before and after their scheduled shifts, such as picking up and returning job materials, undergoing security checks, and completing paperwork. He and the other employees entered the employer’s premises through a security gate where their vehicles were checked before driving about 10 to 15 minutes to the employee parking lot.
During this time, there were certain rules that were subject to and policies of CSI, including not playing music loudly, obeying speed limits, and complying with the company’s drug and alcohol policies. So Huerta argued that this uncompensated time on the premises should be considered compensable work under California labor laws. This case began in federal court, but since it involved unanswered questions of California state law, the Ninth Circuit utilized a procedure to ask the California Supreme Court to weigh in. Megan, what did the California Supreme Court have to say?
MeaganWell, there are two main holdings that I want to go over today. First, the court was asked, is time spent on an employer’s premises in a personal vehicle and waiting to scan an identification badge, have a security guard peer into a vehicle, and then exit the security gate compensable as hours worked? As the court determined, yes. An employee’s time spent on an employer’s premises awaiting and undergoing an employer-mandated exit procedure that includes the employer’s visual inspection of the personal vehicle is compensable as hours worked. Here, the court determined that the following factors were sufficient indicia of employer control to transfer the time to compensable hours worked. First, the employees were required to wait and undergo the exit security procedure before leaving the work premises. Two, employees remained confined to the employer’s premises until those exit procedures were completed. Three, employees were required to perform specific and supervised tasks as part of the exit procedure. This included driving the vehicle to the security gate, waiting until it was their turn, rolling down the vehicle’s window to present the security identification badge, and then submitting the vehicle to an individual inspection. For these reasons, the court determined that the employee exerted sufficient control to be considered hours worked.
Second, the court was asked whether the time spent on the premises in a personal vehicle driving between the security gate and then the parking lot was subject to certain rules from the employer to also make it hours worked. Here, the court determined that travel time from a security gate to an employee parking lot is only compensable if the security gate is the first location where an employee is required for an employment-related reason other than simply accessing the workplace. The court cautioned that this would be dependent on the specific facts in a specific case. However, the court also noted that simply driving a personal vehicle on an employer’s premises before or after a shift while subject to the employer’s rules, such as how loud the music can be, does not necessarily make that time compensable as hours worked, especially where those rules are designed to ensure safe, lawful, and orderly conduct while traveling on the employer’s premises. Lukas, given these two holdings, what are some key takeaways for employers?
LukasYes, I think there are several things employers should take away from this rolling. Employers should ensure that they are accurately tracking and compensating employees for all work-related activities, including those things like, similar to what was at issue in this case, that may have previously been overlooked. Employers should take note of whether and to what extent they place rules or restrictions on employees’ activities while on-premises. It’s also a good idea to review your policies and practices regarding employee timekeeping, task assignments, and compensation to make sure those all align with this ruling. Policies should clearly define what constitutes compensable time, especially when it comes to activities performed before or after scheduled work hours on the employer’s premises. Policies should also expressly discuss when employees are expected to start and end this compensable work activity to avoid any ambiguity and potential disputes. Finally, employers should make sure that all managers and supervisors are also properly trained on how to accurately track and compensate employees for all of these types of activities.
MeaganThanks, Lucas, and that does it for today. Thank you for joining us. You can continue to find “California Employment News” at www.theleblog.com and wherever you listen to your favorite podcast. We’ll see you next time.
Essential leave laws every CA employer should know! Weintraub Tobin attorneys Meagan Bainbridge and Ryan Abernethy break down the key points and provide practical advice on managing these leaves in the latest installment of California Employment News.
Watch this episode on the Weintraub YouTube channel here.
Show Notes:Meagan:Hello, everyone. Thank you for joining us for this installment of the California Employment News, an informative video and podcast resource offered by the Labor and Employment Group at Weintraub Tobin. My name is Meagan Bainbridge, and I’m a shareholder in the Firm’s Labor and Employment Group. Today, I’m joined by my partner, Ryan Abernethy, to recap for you a recent seminar we presented on which provided a comprehensive review of leave laws all California employers should be aware of. Ryan, why don’t you start us off with a review of the big two, the Federal Family Medical Leave Act and California’s Family Rights Act?
Ryan:Thanks, Megan. The Federal Family Medical Leave Act or the FMLA, and the California equivalent, which is the California Family Medical Rights Act or the CFRA, they provide eligible employees with up to 12 weeks of unpaid, job-protective leave to care for their own serious health condition or a family member with a serious health condition or to bond with a new child. The FMLA only applies to employers with 50 or more employees within a 75-mile radius, but the CFRA applies to all California employers who have as few as five or more employees. The 12 weeks of unpaid leave is available for employees to take every 12-month period as set by the employer. But the 12 weeks of leave don’t have to be taken all at one time. Employees can take FMLA or CFRA leave on an intermittent or reduced schedule basis. But thankfully for employers, CFRA and FMLA leave, they run concurrently with only a few exceptions. The FMLA and CFRA provide eligible employees with leave coverage to care for most immediate family members, including even adult children, under certain circumstances. And the CFRA only provides coverage for parents-in-law and registered domestic partners. In addition to family members, the CFRA also provides leave for every eligible employee to care for a designated person and whose connection with the employee is the equivalent of a family member. This could be people such as a close friend or a roommate. Again, employees can seek coverage to care for these individuals as well. The FMLA and CFRA also provide enhanced job protections of up to 26 weeks of leave for demands associated with family members, military deployments, or military injuries. So, Megan, can you tell us a bit about the pregnancy disability leave?
Meagan:Yeah, of course. So, pregnancy disability leave is the third category of protected extended leave. It provides job-protected unpaid leave for up to four months if a person is disabled due to pregnancy, childbirth, or a related medical condition. This leave is available to employers with employees of five or more, and it runs concurrently with FMLA but not with the CFRA. What that means is employees may be eligible for up to seven months of protected leave, four months for the period in which they are disabled due to pregnancy, and an additional three months of baby bonding leave. In addition, there are numerous other states that provide employees’ leave beyond the traditional leave laws we regularly think of. Previously this year, Beth and Shauna presented episodes on the recent updates to the California Paid Sick Leave Statute, a new protected leave of absence for reproductive loss. There are also leaves that allow employees to attend the funeral of a loved one, vote in an election, serve on a jury, obtain domestic violence protection, take part in a trial as a victim of crime, participate in a child’s school activities, attend an adult literacy program, participate in rehab, donate organ or bone marrow. There are also leaves specifically for employees in the military and/or their spouses. Many of these leaves are dependent on how many employees an employer has, so it’s important for employers to understand which leave laws might apply to them. Finally, employers should also be aware that further leave beyond that which is required under the FMLA, CFRA, PDL, or any of those other statutes may be required under the Americans with Disabilities Act. Ryan and I will be back in a few weeks to discuss reasonable accommodations. Until then, Ryan, do you have any advice for employers as they provide protected leaves to their employees?
Ryan:Certainly, yeah. Thanks, Megan. While employers are required to provide all these types of medical-related leaves, they don’t have to just take their employee’s word for it that such leave is warranted. Employers may require medical certification, provided that it’s sent within 15 days of any request for FMLA or CFRA leave. The California Civil Rights Department has a standard form that’s available on their website for medical certification, and that includes all the relevant information, such as whether a serious health condition exists that prevents the employee from performing the essential functions of their job, as well as the expected return date of the employee. The form also contains the required disclaimers and limitations that prevent the employee’s healthcare provider from sending the employer too much information about the employee’s health condition. Too often, clients do call us and tell us about an employee who has been absent from work for an extended period of time, and they don’t know what to do, or they want to terminate the employee, for instance, who is on leave. We ask the client how they designated the absence; we all too often get the response, “Well, we just accepted the doctor’s notes,” or “We just put them on a personal leave based on what they told us.” It’s wise for employers to evaluate the reason for the employee’s absence and whether it falls into any particular leave or accommodation statutes at the very start of the leave and then to designate that leave and absence accordingly. Lastly, I’ll say that all the statutory leave and accommodation laws have anti-retaliation provisions. Most of the leave statutes also have a right of reinstatement provision. Employers must always make employment decisions while someone’s on medical relief based on legitimate non-retaliatory reasons. If an employer fails to reinstate or terminate an employee during a medical leave or upon completion of a medical leave, an inference will exist that the employer terminated that employee because they engaged in protected activity.
Meagan:That’s right. That does it for today. Thank you for joining us. Ryan and I will be back soon to delve into reasonable accommodations, so stay tuned for that episode. You can continue to find California Employment News on our blog at www.thelelawblog.com or wherever you listen to your favorite podcast. We’ll see you next time.
As temperatures rise, California law requires employers with outdoor employees to take steps to protect workers from heat illness. Shauna Correia reviews Cal/OSHA’s ‘Heat Illness Prevention Standards” for outdoor worksites in this episode of California Employment News.
Watch this episode on the Weintraub YouTube channel here.
Show Notes:Shauna:Hi. Thanks for joining me again here today on “California Employment News”. I’m Shauna Correia and today; I’m going to talk to you about heat illness standards. It may have seemed like winter was never going to end, but now that warm weather is approaching, now is the perfect time for those employers with outdoor employees to get prepared. Because California law requires employers to take steps to protect workers from heat illness. So, when the temperature reaches 80 degrees, Cal OSHA’s heat illness prevention standards kick in at outdoor work sites. And there are four basic requirements that employers need to be aware of. The four requirements whenever the temperature reaches 80 degrees are water, rest, shade, and training. With water, the employers must provide outdoor workers with access to free, cool, fresh drinking water, and they need to have at least one quart of water per employee per hour available to drink on those outdoor work sites. And rest: when it’s over 80 degrees outside, employees must have the opportunity to take cool-down rest breaks of at least five minutes whenever they feel the need to do so to prevent symptoms of heat illness. This is in addition to those regular meal periods that are 30 minutes and the 10 minutes rest periods.
For shade, this means having shade structures as close as possible to the working employees. The shade structures can be natural or artificial, but they need to be sufficient to provide shade to accommodate all of the employees who will be on a break at a given time. For training, Cal/OSHA requires written materials and notices. Companies should include heat illness training as part of your regular rotation of safety meetings, especially when the temperature starts to get warm. Whenever the temperature is going to exceed 80 degrees, supervisors will need to have a brief daily tailgate meeting to remind workers of their rights to encourage them to drink water and take breaks before they begin to suffer health effects. When the temperature is going to exceed 95 degrees, agriculture, and construction workers need to be provided additional scheduled water breaks, and four persons and supervisors need to hold pre-shift meetings, reminding employees to drink plenty of water and to take those cool-down rest breaks when they need to. Cal/OSHA has resources courses for free on its website, including posters and sample heat prevention procedures, and your Weintraub, Tobin labor and employment attorneys are here to help as well. Well, that’s all for today.
Thanks again for joining me, and please check out our website, www.Weintraub.com, and our blog at www.thelelawblog.com, where you can find more installments of “California Employment News”. Thanks again.
Navigate California’s at-will employment landscape, ensuring professionalism and legality in employee termination. Nikki Mahmoudi and Tomiwa Aina of Weintraub Tobin’s Labor and Employment Group discuss the complexities on this installment of’ California Employment News.
Watch this episode on the Weintraub YouTube channel
Show Notes:Nikki:
Hi, everyone. Thank you for joining us for this installment of the “California Employment News,” an informative video and podcast resource offered by the Labor and Employment Group here at Weintraub Tobin. My name is Nikki Mahmoudi, and I’m an associate in the group. I’m joined today by Tomiwa Aina, another associate in the group. If you were able to join us at our March seminar, you’ll recall that we discussed general considerations to keep in mind with employee terminations. Today, Tomiwa and I are going to expand on that. As we discussed in our CEN episode on employee discipline, an employee’s termination should not come as a surprise. The key really is documentation. You want to make sure you’re documenting performance and attendance problems, performance evaluations and counseling, documenting behavioral problems, documenting policy violations, disciplinary actions, as well as inquiries and investigations into misconduct and/or policy violations. That way, if you need to terminate an employee, it’s not something completely out of the blue for them. With that said, when it comes to terminating employees, some general things you want to keep in mind. The default rule in California is an employer or employee may terminate the employee relationship at any time with or without cause and with or without notice.
We call this at will. You have at-will employment in California. Before terminating an employee, you want to be able to articulate and, better yet, document the legitimate business reason for the termination, even if your employee is at will. Having a legitimate, non-discriminatory, or retaliatory reason for the termination is really the focus of any termination. The reason must be unrelated to the employee’s protected class or protected activity. So, when I’m talking about discrimination and retaliation, discrimination is when employment decisions are not based on skills, qualifications, and ability but rather on protected characteristics. That’s going to include race, color, national origin, religion, sex, gender, age, etc, stuff like that. With retaliation, what happens is you have a protected activity. Let’s say an employee spoke out about or opposed what reasonably appeared to be an unlawful activity, and then you have an adverse employment action. What happens is after engaging in that protected activity, the employee suffered some adverse employment action. There’s going to be a causal connection between that protected activity and the adverse employee action. Oftentimes, it’s a closeness in time. Again, the thing is when you have to terminate an employee, you want to be able to articulate that legitimate business’s decision that’s not discriminatory and not retaliatory.
Tomi, are there any other general tips you have for terminating employees?
Tomiwa:
Yes. Thanks, Nikki. In the case where you have actually planned to terminate an employee, there are certain things you want to keep in mind. First, you should prepare your recommendation as to the appropriate course of action for that employee. You want to also review all your supporting documentation to ensure their accuracy and that they are complete. Next, make sure you take a look at your action plan and review all supporting documents with the other decision-makers in your company. For example, if you need to consult with legal, your in-house counsel, or human resources. Also, before terminating the employee, there are certain questions you want to ask yourself, and a couple of them include: will the termination violate any public policy? Is there an outstanding or settled worker’s compensation claim subjecting the employer to a retaliation action? Because the closest in time with those claims and the termination is definitely prevalent in any retaliation decision. Next, you also want to ask, will the termination of the employee prevent the vesting of any benefits? Also, did the employee’s protected status arguably have anything to do with the decision, or will it appear that recent employment decisions are adversely affecting a protected class? Next, you should also consider whether or not it’s appropriate to terminate the employee or just suspend them pending further investigation. You want to take a look at whether or not your actions are consistent with prior incidents of a similar nature, especially as it relates to employees in the same protected class. Nikki, can you tell us a little bit about considerations for the termination meeting with the employee?
Nikki:
When it comes to the actual time you want to terminate an employee, remember it’s not an easy conversation for you to have. It’s not easy for you; it’s not easy for the employee. But you want to handle it in as humane a manner as possible. Some things to keep in mind are: one, is that interview going to be conducted in private? It’s not something you’d probably want to have in the staff, let’s say, lunch area where others can be. It’s something that, to the extent you can, you want to have in a private space. Another thing to keep in mind is, are you prepared to be calm and factual? Again, this is something where it can be emotional, but to the extent you can, you want it to be you’re in a calm state; you can present the facts that need to be presented. Another thing is, should a witness be present? Would it be helpful to have a supervisor there, someone in HR there? Really, I think the general consideration to keep in mind is you want to handle the conversation with professionalism and respect. Be straightforward about the reason for termination. Explain to an employee that their services are no longer needed in a respectful and professional manner, and make sure to listen to those employees’ concerns and answer any questions they have.
Tomi, are there any recommendations you have on common mistakes for employers to avoid?
Tomiwa:
Sure. Thanks, Nikki. So, one thing to keep in mind is that you don’t want to allow your documentation to create a false sense of impression of sudden deterioration in performance after many years of acceptable performance. And you also want to avoid squirreling away complaints and not addressing them until perhaps when you’re thinking, “Okay, maybe I should terminate this employee?” So make sure you’re addressing complaints or performance issues in a timely and appropriate manner, and that will also get you in the good habit of having proper documentation. Also, you want to make sure you have good evaluations for the poor performance of the employee if performance is a reason that you’re terminating the employee. And lastly, you should also avoid playing the doctor and making judgments about an employee’s medical condition. For example, if they say they can’t work for some reason, you should accept your doctor’s note and not try to pass judgment on the actual medical conditions of that employee. Well, that is it for now. You can continue to find our video series and podcast through the lelawblog.com or on Weintraub Tobin’s YouTube channel. Thank you very much, everyone, for joining us today, and we look forward to reconnecting with you on our next edition of “California Employment News.”
Get an overview of AB 1228’s intricacies and its impact on fast-food workers, from wage increases to exemptions. Tomiwa Aina and Nikki Mahmoudi continue the discussion on the fast-food minimum wage increase in this installment of California Employment News.
Review our previous episode, “Top Developments in Wage and Hour Law for 2024“
Watch this episode on the Weintraub YouTube channel
Show Notes:Tomiwa: Hello, everyone. Thank you for joining us today for this installment of the “California Employment News”, an informative video and podcast resource that’s offered by the Labor and Employment Group at Weintraub Tobin. My name is Tomiwa Aina, and I am an associate at Weintraub Tobin. And today, I am joined with Nikki Mahmoudi, also another associate at Weintraub Tobin. Now, a few weeks ago, we had a “California Employment News” episode on the top developments in wage and hour law for 2024. In that episode, Ryan Abernathy and Lucas Clarey briefly touched on the new legislation, AB 1228. That legislation increases the wages of fast food workers to $20 an hour, effective April 1, 2024. This legislation also creates the Fast Food Council, and since this law was announced, there has been quite a bit of confusion, and many employers are left wondering as to whether or not the law applies to them. We have gotten some clarification from the Department of Industrial Relations in a March 2024 Frequently Asked Questions that they published, as well as from the Fast Food Council meeting on March 15, 2024. So thank goodness for that. Today, we will discuss some of those clarifications with you, as well as a quick overview of the new law. Now, you can find a link to the FAQ in the text below. However, we’d like to note that today is just a brief overview of the subject, and it’s important to check with your council if you have any questions as to whether or not the fast food increase applies to your workers. Also, as a word of caution, since the increase in the workers’ wages just went into effect on April first, we anticipate that more clarification from the Department of Industrial Relations will follow, and also from the Fast Food Council. What we’re discussing today, though, is based on what we know as of April 1, 2024. Now, Nikki, can you tell me a little bit more about the fast food wage increase and who it applies to?
Nikki: Of course. Let’s get into it. As I’m sure you’re aware, the California minimum wage, effective January 1, 2024, is $16 an hour. But under AB 1228, as of April 1, 2024, the minimum wage for fast food restaurant employees is $20 an hour. This law also establishes a Fast Food Council who will meet regularly to develop new minimum employment standards specific to the fast food industry, including future minimum wage increases, as well as working hours and working conditions. So, who are fast food restaurant employees? A fast food restaurant is defined as a limited service restaurant in the state, so California, that is a party of a national fast food chain. What does that mean? We’re going to break that down even more. A limited service restaurant is going to include an establishment within the North American Industry Classification System Code 722513. I’m probably not making this any more clear, but we’ll break it down even more. This is consisting of establishments primarily engaged in providing food services where patrons generally order or select items and a day before eating. And food and drink at these restaurants can be soon on-premises, taken out, or delivered to the customer’s location. Examples are going to include takeout sandwich shops, pizza delivery shops, and so on. Now, the Fast Food Council and the Department of Industrial Relations, or the DIR, as we call it, in their FAQs has clarified that other establishments could also fall under a limited service restaurant. That’s going to include chain donut stores, ice cream shops, café selling coffee and tea, boba tea shops, and so on. Based on what we currently know, a limited service establishment is not limited to the establishment in that North American Industry Classification System Code, 722513. Now, going into what a national fast food chain is, that’s a set of limited service restaurants consisting of more than 60 establishments nationally. That was a key question, is it within the state or outside. It’s going to be all over the country that share a common brand or that are characterized by standardized options for decor, marketing, packaging, products and services, and primarily engage in providing food and beverages for immediate consumption on or off premises where patrons generally order or select items and pay before consuming with little or no table service. Now, there are some exceptions to this, I’ll go into a few notable ones. Fast food restaurants do not include a restaurant located in an airport, although there are even more exclusions to that, and restaurants connected to or operating in conjunction with the following locations: hotels, event centers, theme parks, public or private museums, and gambling establishment. Another exception is when a restaurant is located and operates within a grocery establishment, and then the grocery establishment employer employs the individuals working in the restaurant. With all these exceptions, I’m giving a very brief overview. It’s important, again, to talk to your counsel or look at how the terms are defined in the code. That’s in labor code sections 1474 to 1476. Those are where the new fast food laws are. One other notable but not inclusive exception is the bread exemption. Tomi, could you tell me a little bit about that?
Tomiwa: Thank you, Nikki. This one is a bit technical. Restaurants that, as of September 15, 2023, operate a bakery that produces for sale on their premises bread as defined under the Code of Federal Regulations as a standalone menu item, and that continue to do so are exempt from the new law. What does this mean? Restaurants that sell bread only as a part of a sandwich or hamburger, not as a standalone item, would not come under the exemption. This would not require that the restaurant be primarily engaged in the sale of bread as a standalone item, though. The exemption could even apply when the sale of bread at a restaurant constitutes a small portion of that restaurant’s total food sales. Now, to confirm that you meet this bread exemption, it can be a little bit technical. You’d have to look at the code of federal regulations and also consult with your attorney.
Nikki: Thanks, Tomi. Well, as you can see, this can be a lot. It’s important to check with your counsel, look at labor code sections 1474 to 1476, and check the Department of Industrial Relations website for any FAQs, check for updates from the Fast Food Council, and so on, to get a sense of all of this. You can continue to find our video series and podcast through the lelawblog.com or on the Weintraub Tobin YouTube channel. Thank you, everyone, for joining us, and we look forward to reconnecting with you on our next edition of “California Employment News.”
Having a fair and meaningful disciplinary process can be a helpful tool for employers to improve employee performance. In this episode of California Employment News, employment attorneys Meagan Bainbridge and Nikki Mahmoudi share their best practices for implementing effective disciplinary procedures in the workplace.
Watch this episode on the Weintraub YouTube channel.
Show Notes:Shauna:Hello. Thank you for joining us for this installment of the California Employment News. My name is Shauna Correia, and I’m a shareholder here at Weintraub Tobin in the Labor and Employment department. And I’m joined by my partner, Beth West. As you probably know, California has had a paid sick leave law in effect since 2015, and that law has been amended effective as of January 1, 2024. So today we’re going to discuss Senate Bill 6116, which amended the Healthy Workplace Healthy Families Act. And, Beth, would you be so kind as to summarize the law for us? Sure.
Beth:Thanks, Shauna. So, under the Healthy Workplace Healthy Families Act, most full-time, part-time, and even temporary employees are entitled to earn paid sick leave, often referred to as PSL. If the employee works for the same employer in California for at least 30 days within a year. PSL can be used by an eligible employee for themselves or a family member for various reasons, such as preventative care or diagnosis, care for treatment for an existing health condition, or for specific purposes for things like victims of domestic violence, sexual assault, and stalking. As stated in the statute, there are different methods that the employer can use to provide PSL to employees. One is the statutory accrual method. Under this statutory accrual method, an employee earns 1 hour of PSL for every 30 hours worked upon commencement of employment. There’s an alternative accrual method that’s permitted that allows the employer to provide PSL under a company policy, either sick leave or PTO policy, provided certain conditions are met, and Shauna will explain in more detail based on SB 1616, excuse me, what those conditions are. There’s also a provision in the statute for grandfathered policies. In some cases, if an employer had a policy in place before the law went into effect in 2015, the employer can continue to use that policy to meet its obligations under the law, provided the policy meets the conditions outlined in the statute.
And again, Shauna will explain what those are because they were modified by SB 616. There’s also a nonaccrual method, an alternative to providing PSL, often referred to as the lump sum or front-loaded method, and that allows the employer to provide employees with the required amount of PSL at the beginning of a year-long period. And Shauna will explain what SB 1616 states is required to be provided to employees under that method. If an employer is using an accrual method, the law allows the employer to place a cap on the total amount of paid sick leave an employee can accrue, provided the cap is no less than the cap stated in the statute. Also, the law permits an employer to limit the total amount of paid sick leave an employee can use in a given year, again, provided that the limit is no less than that stated in the statute. Under the law, the employer gets to determine the applicable twelve-month measurement period in which paid sick leave is earned and used, for example, a calendar year or the employee’s anniversary year. And then finally, while accrual of paid sick leave begins upon higher or is earned all at once if the employer is using the front load method, an employer may choose to implement a 90-day waiting period before an eligible employee can use earned paid sick leave.
Shauna, why don’t you now explain SB 616 and the changes it made to the sick leave law?
Shauna:Sure. So, SB 616 amended the Healthy Workplace Healthy Families law in a few key ways. I’ll go through the major changes, which are minimum accrual use, minimum leave carried over the alternative accrual methods, and preemption of local ordinances, and then I’ll also discuss the changes required to make sure that these grandfathered plans that Beth was just talking about are still compliant with the new law. So, for the minimum use cap, the standard accrual method on the statute is still 1 hour for every 30 hours worked. But before, an employer could cap an employee’s use of leave in a given year to three days or 24 hours, and now the law requires that that increases to five days or no less than 40 hours of sick leave that can be used in a calendar year or whatever other twelve month period the employer chooses. And so after the end of that calendar year, sometimes employees haven’t used all of the time, and they get to carry some of that over. And their employers are not required to cap accrual, but can choose to cap accrual of carried-over sick leave to the following year of employment, they can still limit that.
Beth:But any limitation on the use of the carried-over sick leave must be increased to at least 40 hours or five days in each year of employment. And the minimum that you can allow employees to carry over from year to year used to be 48 hours or six days. And so, effective January 1 of, 2024, that is now 80 hours or 10 days. So the minimum accrual cap that an employer can have be the 80 hours in their bank before the employee uses sum up, and then could start accruing again once they deplete their bank. So employers who self-administer their payroll, in particular, should review their carryover rules in the system to make sure that the leave carried over from 2023 satisfies this new requirement. And then with regard to these alternative accrual methods, as Beth mentioned, employers can establish alternative methods such as a lump sum grant as long as it meets certain conditions. And so for employers who have a paid sick leave or PTO policy that have some different accrual plan other than 1 hour for every 30 hours, the law previously said, well, it just must ensure that employees have at least 24 hours or three days of paid sick leave available to be used by their 120th day of employment while beginning this year in 2024.
Shauna:Employers who have an alternative method, like a lump sum method, must ensure that the employees also have at least 40 hours accrued by the 200th calendar day of employment or in each twelve-month period. So if the employer is going to deposit a lump sum, they must deposit the full at least 40 hours or at least five full days of paid sick leave at the beginning of that year. Now, when we say 40 hours or five days, it’s important to note that this five-day requirement could be more than 40 hours if the employee is in a job where they typically work more than an eight-hour shift. So if they work 10 hours, then five days would be 50 hours. Finally, with regard to the grandfathered plans that Beth was describing earlier, if an employer has a paid time off PTO or PSL policy that was grandfathered from prior to 2015, they can continue to maintain those plans, but they do need to satisfy these conditions that I’ve just discussed in the new law. And so, the use and carryover caps must reflect these new minimums and an employee must be eligible to earn at least 40 hours or five days of sick leave or paid time off within six months.
And in particular, if the PTO or grandfathered PSL policies have different provisions or prorated accrual for part-time employees, these need to be reviewed to make sure that the part-time employees meet these new minimums. So if an employer has a grandfather plan using an alternative accrual method, we’ll have to also make sure that if they use a lump sum, for example, they’ll have to provide an annual minimum lump sum that satisfies these increased use and carryover caps. And finally, because the new state law now might be more generous than local ordinances, the state law now preempts those local ordinances to the extent that they’re inconsistent or provide fewer hours. So if you’re in a location like Los Angeles or Berkeley where you have a local sick leave ordinance, you must still require the minimums under the new state law. One last thing I’d like to just mention is that in the past couple of years, the legislature has enacted unpaid bereavement and reproductive loss leave statutes. So employers now must allow employees to use their paid sick leave or their PTO for those otherwise unpaid time off under those new laws. And we’ll discuss the new reproductive loss leave in a coming installment of California employment news.
Beth:Thanks, Shauna. That was a really good oversight of SB 616. Well, that’s it for today, everyone. You can continue to find installments of California employment news on our blog at www.theeleleblog.com or wherever you listen to your favorite podcasts. Thanks for joining us. See you next time.
From minimum wage laws to confidentiality agreements, there have been several legal updates over the past year that apply to most CA employers. Lukas Clary and Ryan Abernethy break down five top developments in wage and hour law for 2024 in this special 50th edition of California Employment News.
Watch this episode on the Weintraub YouTube channel here.
Show Notes:Ryan: Hi, everyone. Welcome to the latest installment of “California Employment News.” I’m Ryan Abernathy, and I’m here with Lukas Clary, and we’re both shareholders here at Weintraub Tobin’s Labor and Employment Practice Group. Today we’re going to be going over and talking with you some things about five top developments in wage and our law this past year that should apply to most California employers. So, Lukas, why don’t you start us off by sharing some of the developments you found for us?
Lukas:
Yeah. Thanks, Ryan. So, I think the first place I want to start is to remind everyone of changes around the minimum wage laws here in California. So, just a real quick recap: for about the past decade or so, we’ve been on what I call the march to $15, which was the march to get to $15 an hour as the minimum wage. It’s kind of crazy to think about now, but as recently as just a decade ago, roughly the minimum wage was only $8 an hour. And then we slowly went up in small increments until getting to $15 within the last couple of years, depending on the size of your workforce. And many thought we were done once we got to $15, but it wasn’t that simple. The bill actually required or implemented an instrument for periodic additional increases tied to inflation, and that recently got us to $15.50 as the statewide minimum wage last year. And now, beginning January 1 of this year, we are at $16 an hour as the statewide minimum wage. That is the rate regardless of employer size at this point. Then, beyond that statewide total, we also have to keep in account of local minimum wages that many employers need to be aware of. While no cities or counties can reduce the statewide $16 an-hour minimum wage, they are permitted to set higher minimum wages. And several cities, mostly around the Bay Area and parts of southern California, have done just that. We have local minimum wages in several cities that are upwards of $17, $18, and even, in some places, $19 an hour. So, employers in those areas need to be sure to check local minimum wages as well. Finally, this year, we have a few specific industries that now have higher minimum wages than even the statewide requirement. First, there’s a new law that requires fast food employers, basically, those restaurants that offer primarily counter service, in chains with 60 or more nationwide locations, so think about your McDonald’s, Subway, and Taco Bell-type places. They now have to pay a minimum wage of at least $20 an hour beginning this coming April 1. Then there’s another bill that requires healthcare workers to earn minimum wages of anywhere from $18 to $23 per hour, depending on the size of the employer and the type of worker. So, employers in those industries should consult with their legal counsel to make sure they are paying the proper rate that applies to any one of their given employees. For all other employers, $16 is the local minimum now, but they should be aware of those minimum wages specific to the healthcare and fast-food industries because you should know your employees now have that out there if they want to make minimum wage in those fields. So, Ryan, beyond minimum wage, what other new wage and hour updates should employers be aware of?
Ryan:
Yeah, so this past year, we actually saw some big changes in the way that PAGA claims are treated here in California. So, just to remind everyone, the Private Attorney General Act, or the PAGA, it authorizes employees to file lawsuits to recover penalties from their employers on behalf of themselves, other employees, and the state of California for labor code violations. And these PAGA claims, they look a lot like class actions in a lot of ways, but when it comes to arbitration agreements. So, while a valid arbitration agreement between an employer and employee can, in some instances, lead to a complete dismissal of a class action, last year, in the case of Adolf versus Uber Technologies, the California Supreme Court held that arbitration agreements cannot prevent an aggrieved employee from seeking recovery under the PAGA on behalf of other similarly situated employees. So, this was an expensive hit for California employers. On the bright side, however, the Adolf court did leave open few benefits that arbitration agreements may still have in PAGA actions. And obviously, such agreements, they remain a valuable tool for employers in the defense of class action claims. So, employers are wise to continue to use and update their arbitration agreements where appropriate. This year, we also saw two important developments coming from the National Labor Relations Board or the NLRB. So first, the NLRB held that confidentiality and nondisparagement provisions in severance agreements are now impermissible if they could reasonably be interpreted as preventing the employee from discussing their severance agreements with their coworkers or from making public statements about the workplace. So, the NLRB further held that defective provisions are unlawful, even if the employee was the one who requested the provision, and that merely offering a defective confidentiality or nondisparagement provision is enough to constitute a violation of the act. But the NLRB did clarify that severance agreements are not entirely prohibited, but it remains entirely unclear to what extent confidentiality or nondisparagement provisions can be enforced at all. So, the second big development we got from the NLRB this past year was their plan to increase scrutiny of employer handbooks and workplace policies. So, under the old Boeing test, the NLRB broadly considered certain types of work rules to always be lawful, regardless of how they were drafted. Under the new standard, these same policies will be closely scrutinized on a case-by-case basis, and policies or rules that could reasonably be interpreted to infringe on employee’s protected concerted activity will be considered unlawful labor practices or unfair labor practices. So, policies that are expected to draw particular attention from the NLRB include meal break policies, social media policies, and confidentiality rules. So, Lukas, why don’t you close us out with a few remaining top developments this year.
Lukas:
Yeah, thanks, Ryan, so that’s certainly a lot to process. I hate to add more, but I wanted to briefly return to the minimum wage increase that I discussed earlier and specifically how that might impact your exempt employees. So many employees can be exempt from certain wage and hour laws such as overtime, minimum wage, and meal and rest breaks. The most common exemptions that employees may qualify for are what we call the white-collar exemptions. These are the exemptions that are available to certain managerial, professional, and administrative employees if they meet a number of requirements. Well, one of those requirements is that they earn a set minimum salary that is tied to California’s minimum wage. So, more specifically, employees classified as exempt under one of those white-collar exemptions must earn a minimum salary that is equal to double the statewide minimum wage for a full-time employee. So, with the minimum wage now at $16 an hour, the minimum exempt salary under those white-collar exemptions is $1,280 per week or $66,650 per year. If someone’s being paid less than that, they won’t qualify for those exemptions. Then there are also minimum salary requirements for some of the lesser-used exemptions, and those have changed this year as well. For example, employees who are classified under the computer professional exemption must now earn at least $55.58 an hour, which carries out to $115,763 per year for full-time employees. If they make less than that, they are not going to qualify for that exemption. Similarly, licensed physicians and surgeons must now earn an hourly rate of at least $101.22 to qualify for the exemption available to them. Because minimum pay is just one of several criteria employees must meet to qualify for all of those exemptions, this is also a good reminder to consult your employment law counsel to make sure any employees classified as exempt meet all the criteria and are properly classified. Well, that’s it for today. Thanks for joining. You can continue to find installments of “California Employment News” on our blog at www.theleblog.com or wherever you listen to your favorite podcasts. Thanks, and see you next time.
There are a number of statutes in California that grant eligible employees the right to take a leave of absence for various reasons. SB848 creates a new leave of absence entitlement under CA law regarding reproductive loss. Lizbeth “Beth” West and Shauna Correia review this new protected leave in this episode of California Employment News.
Watch this episode on the Weintraub YouTube channel here.
Show Notes:Beth: Hello. Thank you for joining us for this installment of California Employment News, an informative video and podcast series brought to you by the labor and employment group at Weintraub Tobin. My name is Beth West, and I’m a shareholder here at Weintraub Tobin and chair of the labor and employment department. I’m joined today by my partner, Shauna Correa. As you likely know, there are a number of statutes in California that grant eligible employees the right to take a leave of absence for various reasons. Today, we’re going to discuss Senate Bill 848, which creates a new leave of absence entitlement under California law. Shauna, why don’t you start us off and explain what types of leave SB848 provides for?
Shauna: So, this is a new law that passed to provide up to five days of unpaid leave for employees who suffer a reproductive loss event. And this law fills a bit of a gap that was left by the bereavement law passed and took effect in 2023. This new law applies to any employer who has five or more employees. So, what is a reproductive loss event? A reproductive loss event is the day of, or in the case of a multiple-day situation, the final day of a failed adoption, a failed surrogacy, a miscarriage, a stillbirth, or an unsuccessful assisted reproduction. This includes, like I said, failed surrogacy and failed adoptions. Well, what does that mean? A failed adoption means that there was a dissolution or a breach of the agreement with the birth mother or legal guardian of the child to adopt the child so that the adoption does not take place or the adoption isn’t finalized because some other party contests the adoption. So, who can take leave if there is a failed adoption? Any person who would have been the parent of the adoptee, meaning the child, if the adoption had been completed. Any of those people can take leave after a failed adoption. A failed surrogacy means that there was a dissolution or breach of the surrogacy agreement with the person that was going to carry the embryo or the embryo transfer was unsuccessful and it didn’t transfer successfully to the surrogate. And so, if there is a failed surrogacy, the people who would have been the parents of the child can take leave because the surrogacy failed. This may seem to leave a little bit of a gap for the person who acted as a surrogate, who herself may have suffered a loss of the failed embryo transfer, but that person would be covered if they suffered an unsuccessful reproduction. Well, what does that mean? An unsuccessful reproduction is an unsuccessful round of either inner uterine insemination, embryo transfer, or other assisted reproductive technology procedure could involve a surrogate, or it could just involve the woman who is going to become the parent of the child. And likewise, if there is a miscarriage, stillbirth, or unsuccessful reproduction, rather, unsuccessful assisted reproduction, then the people who can take the leave are the person who is pregnant, or that person’s current spouse or, domestic partner, or another individual. If that person would have been the parent of a child born as a result of the surrogacy. So, the example there would be the parent of a child being carried by a surrogate who may have had a stillbirth or miscarriage. This statute does not provide time off, however, to get an IVF procedure done or, to obtain medications, or deal with complications with these procedures. They just deal with the loss of the child to be or the failure of an adoption or failure of a surrogacy. Those other situations might be covered by CFRA or paid sick leave. Beth, can you explain the amounts of leave that can be taken and whether it’s paid or unpaid, and talk about the employer’s obligations in approving leave?
Beth: Sure, Shauna. So SB 848 provides that an employee may take up to five days of leave following any reproductive loss event, which are those events that Shauna just discussed. However, if there’s more than one reproductive loss event experienced by an employee, an eligible employee, within a twelve month period, the employer can limit the total amount of reproductive loss leave to 20 days within a twelve month period. Now, the leave does not have to be taken consecutively, but it does have to be completed within three months of the event, entitling the employee to leave, with one exception, and that is that if an employee is qualified for and takes FMLA or CFRA or even PDL pregnancy disability leave prior to or immediately following a reproductive loss event, then the reproductive loss leave must be completed within three months of the end of that other leave of absence. Whether the reproductive loss leave is paid or unpaid depends on whether the employer had an existing leave policy in place before the law went into effect that provided paid leave for reproductive loss. If no such policy exists, the leave is unpaid, but an employee has the right under the statute to concurrently use any accrued and available vacation, PTO, or sick leave that’s otherwise available. And finally, just like with other statutes that provide employees with leave of absence rights, SB 848 makes clear that an employer may not interfere with, restrain, or deny an employee’s right to exercise their rights under the law and cannot retaliate against an employee who does exercise their rights under the law and unlike bereavement leave SB 848 does not allow employers to ask for documentation to prove a reproductive loss event in fact occurred.
Shauna: Well, thank you for that overview, Beth. That’s very helpful. That’s all we have time for today. But you can continue to find additional installments of the California employment news on our blog at www.theleblog.com or wherever you listen to your favorite podcasts. Thanks for joining. We’ll see you next time.
New laws in 2024 expand workplace protections for employees regarding their current and past cannabis use. Nikki Mahmoudi and Tomiwa Aina review these changes, previewed in our 2024 Employment Law Update seminars, in this episode of California Employment News.
Watch this episode on the Weintraub YouTube channel here.
Show Notes:Nikki:Hi, everyone. Thank you for joining us for this installment of California Employment News, an informative video resource offered by the Labor and Employment Group at Weintraub Tobin. My name is Nikki Mahmoudi, and I’m an associate in the group. I’m joined today by Tomiwa Aina, an associate in the group. Today we’re going to be discussing some new laws in 2024 are expanding workplace protections regarding current and past cannabis use. If you attended the second session of our employment law update, you may have heard us talk about this. Tomiwa, why don’t you start us off?
Tomiwa:Thanks, Nikki. So one of the laws we discussed that went into, in fact, this year is AB2180. And according to this law, California employers are prohibited from discriminating against their applicants or employees in the hiring, termination, or in the terms and conditions of their employment based on their off-duty cannabis use or the results of an employer-required drug screening that detected non-psychoactive cannabis in their hair, blood, or urine or other bodily fluids. Now, one thing that’s important to note about is law is that an employer can still choose to not hire or can choose to penalize a person based on a scientifically valid pre-employment drug screening that was conducted through methods that don’t screen for non-psychoactive cannabis metabolites. The legislator noted that employers now have access to multiple types of tests that do not rely on the presence of non-psychoactive cannabis metabolites. THC is the chemical compound in cannabis that can indicate impairment and cause psychoactive effects. Now, after THC is metabolized, it’s stored in the body as a non-psychoactive cannabis metabolites. Now, these non-psychoactive metabolites don’t indicate impairment, only that an individual has consumed cannabis in the last few weeks. And this test for non-psychoactive metabolites is what most employers have been using until recently.
Now, this new law, AB 2180, exempts certain applicants and employees from the build provisions, and such employees are the ones that are in the building and construction trades and the individuals in positions requiring a federal background investigation or clearance.
The law also doesn’t preempt state or Federal laws requiring applicants or employees to be tested for controlled substances as a condition of receiving federal funding or federal licensing related benefits or entering into a federal contract. So if you’re an employer that falls into one of these categories, you can still use the tests you’ve been using.
To test for non-psychoactive cannabis metabolids, or you can use impairment tests. Now, lastly, AB2180 also provides workplace protection for recreational and medical marijuana users, but it still allows employers to restrict cannabis use on the job. The law doesn’t allow employees to possess, to be impaired by, or to use cannabis on the job. Now, Nikki is going to speak a little bit about another law that expands workplace protections for cannabis users.
Nikki:So I’ll be talking about SB700, which was effective January 1, 2024. And what SB700 did is it also provides workplace protections for marijuana users. It amends government code section 12954 to also make it unlawful for an employer to request information from a job applicant relating to the applicant’s prior use of cannabis unless otherwise required by state or federal law. So what this means is that an employer cannot discriminate against an employee or an applicant based on information regarding prior use of cannabis. That’s learned from a criminal history report unless otherwise permitted under applicable law. So moving forward, what employers want to make sure to do is review their policies and make sure they implement SB700 and also what Tomiwa discussed. Additionally, government code section 12950 and other regulations require California employers to display the California law prohibits workplace discrimination and harassment poster, and that’s required to be in a conspicuous space where employees gather. So an updated poster was recently issued and that does contain information regarding how, for employees who work with employers with five or more employees, California law offers protections against discrimination based on an employee or a job applicant’s use of cannabis off the job and away from the workplace, of course, subject to some possible exemptions. You can get a copy of it from the California Civil Rights department website.
Tomiwa:Thank you, Nikki. Now that does it for today. You can also continue to follow our California Employment News on the blog at www.thelewblog.com, and wherever you listen to your favorite podcast. We’ll see you next time
California recently amended its sick leave law, the Healthy Families Healthy Workplace Act, by increasing paid sick leave accrual mandates and sick time cap amounts. Lizbeth (“Beth”) West and Shauna Correia discuss these changes on this episode of California Employment News.
Watch this episode on the Weintraub YouTube channel here.
Show Notes:Shauna:Hello. Thank you for joining us for this installment of the California Employment News. My name is Shauna Correia, and I’m a shareholder here at Weintraub Tobin in the Labor and Employment department. And I’m joined by my partner, Beth West. As you probably know, California has had a paid sick leave law in effect since 2015, and that law has been amended effective as of January 1, 2024. So today we’re going to discuss Senate Bill 6116, which amended the Healthy Workplace Healthy Families Act. And, Beth, would you be so kind as to summarize the law for us? Sure.
Beth:Thanks, Shauna. So, under the Healthy Workplace Healthy Families Act, most full-time, part-time, and even temporary employees are entitled to earn paid sick leave, often referred to as PSL. If the employee works for the same employer in California for at least 30 days within a year. PSL can be used by an eligible employee for themselves or a family member for various reasons, such as preventative care or diagnosis, care for treatment for an existing health condition, or for specific purposes for things like victims of domestic violence, sexual assault, and stalking. As stated in the statute, there are different methods that the employer can use to provide PSL to employees. One is the statutory accrual method. Under this statutory accrual method, an employee earns 1 hour of PSL for every 30 hours worked upon commencement of employment. There’s an alternative accrual method that’s permitted that allows the employer to provide PSL under a company policy, either sick leave or PTO policy, provided certain conditions are met, and Shauna will explain in more detail based on SB 1616, excuse me, what those conditions are. There’s also a provision in the statute for grandfathered policies. In some cases, if an employer had a policy in place before the law went into effect in 2015, the employer can continue to use that policy to meet its obligations under the law, provided the policy meets the conditions outlined in the statute.
And again, Shauna will explain what those are because they were modified by SB 616. There’s also a nonaccrual method, an alternative to providing PSL, often referred to as the lump sum or front-loaded method, and that allows the employer to provide employees with the required amount of PSL at the beginning of a year-long period. And Shauna will explain what SB 1616 states is required to be provided to employees under that method. If an employer is using an accrual method, the law allows the employer to place a cap on the total amount of paid sick leave an employee can accrue, provided the cap is no less than the cap stated in the statute. Also, the law permits an employer to limit the total amount of paid sick leave an employee can use in a given year, again, provided that the limit is no less than that stated in the statute. Under the law, the employer gets to determine the applicable twelve-month measurement period in which paid sick leave is earned and used, for example, a calendar year or the employee’s anniversary year. And then finally, while accrual of paid sick leave begins upon higher or is earned all at once if the employer is using the front load method, an employer may choose to implement a 90-day waiting period before an eligible employee can use earned paid sick leave.
Shauna, why don’t you now explain SB 616 and the changes it made to the sick leave law?
Shauna:Sure. So, SB 616 amended the Healthy Workplace Healthy Families law in a few key ways. I’ll go through the major changes, which are minimum accrual use, minimum leave carried over the alternative accrual methods, and preemption of local ordinances, and then I’ll also discuss the changes required to make sure that these grandfathered plans that Beth was just talking about are still compliant with the new law. So, for the minimum use cap, the standard accrual method on the statute is still 1 hour for every 30 hours worked. But before, an employer could cap an employee’s use of leave in a given year to three days or 24 hours, and now the law requires that that increases to five days or no less than 40 hours of sick leave that can be used in a calendar year or whatever other twelve month period the employer chooses. And so after the end of that calendar year, sometimes employees haven’t used all of the time, and they get to carry some of that over. And their employers are not required to cap accrual, but can choose to cap accrual of carried-over sick leave to the following year of employment, they can still limit that.
Beth:But any limitation on the use of the carried-over sick leave must be increased to at least 40 hours or five days in each year of employment. And the minimum that you can allow employees to carry over from year to year used to be 48 hours or six days. And so, effective January 1 of, 2024, that is now 80 hours or 10 days. So the minimum accrual cap that an employer can have be the 80 hours in their bank before the employee uses sum up, and then could start accruing again once they deplete their bank. So employers who self-administer their payroll, in particular, should review their carryover rules in the system to make sure that the leave carried over from 2023 satisfies this new requirement. And then with regard to these alternative accrual methods, as Beth mentioned, employers can establish alternative methods such as a lump sum grant as long as it meets certain conditions. And so for employers who have a paid sick leave or PTO policy that have some different accrual plan other than 1 hour for every 30 hours, the law previously said, well, it just must ensure that employees have at least 24 hours or three days of paid sick leave available to be used by their 120th day of employment while beginning this year in 2024.
Shauna:Employers who have an alternative method, like a lump sum method, must ensure that the employees also have at least 40 hours accrued by the 200th calendar day of employment or in each twelve-month period. So if the employer is going to deposit a lump sum, they must deposit the full at least 40 hours or at least five full days of paid sick leave at the beginning of that year. Now, when we say 40 hours or five days, it’s important to note that this five-day requirement could be more than 40 hours if the employee is in a job where they typically work more than an eight-hour shift. So if they work 10 hours, then five days would be 50 hours. Finally, with regard to the grandfathered plans that Beth was describing earlier, if an employer has a paid time off PTO or PSL policy that was grandfathered from prior to 2015, they can continue to maintain those plans, but they do need to satisfy these conditions that I’ve just discussed in the new law. And so, the use and carryover caps must reflect these new minimums and an employee must be eligible to earn at least 40 hours or five days of sick leave or paid time off within six months.
And in particular, if the PTO or grandfathered PSL policies have different provisions or prorated accrual for part-time employees, these need to be reviewed to make sure that the part-time employees meet these new minimums. So if an employer has a grandfather plan using an alternative accrual method, we’ll have to also make sure that if they use a lump sum, for example, they’ll have to provide an annual minimum lump sum that satisfies these increased use and carryover caps. And finally, because the new state law now might be more generous than local ordinances, the state law now preempts those local ordinances to the extent that they’re inconsistent or provide fewer hours. So if you’re in a location like Los Angeles or Berkeley where you have a local sick leave ordinance, you must still require the minimums under the new state law. One last thing I’d like to just mention is that in the past couple of years, the legislature has enacted unpaid bereavement and reproductive loss leave statutes. So employers now must allow employees to use their paid sick leave or their PTO for those otherwise unpaid time off under those new laws. And we’ll discuss the new reproductive loss leave in a coming installment of California employment news.
Beth:Thanks, Shauna. That was a really good oversight of SB 616. Well, that’s it for today, everyone. You can continue to find installments of California employment news on our blog at www.theeleleblog.com or wherever you listen to your favorite podcasts. Thanks for joining us. See you next time.
New legislation coming into effect in 2024 could have CA employers facing greater risks when it comes to using and enforcing non-compete agreements. Ryan Abernethy and Nikki Mahmoudi discuss the enforceability of non-compete agreements in this installment of California Employment News.
Watch this episode on the Weintraub YouTube channel here.
Show Notes:Ryan:Hi, everyone. Thank you for joining us for this installment of California Employment News, an informative video resource offered by the Labor and Employment Group here at Weintraub Tobin. My name is Ryan Abernethy, a senior attorney here in the group. And I’m joined today by Nikki Mahmoudi, an associate in the group. And today we’re going to be discussing non-compete agreements in California. Nikki, can you tell me a bit about non-compete agreements here in the state?
Nikki:Of course. So, first I’ll start explaining what a non-compete agreement is. So, in the employment context, a non-compete agreement is a contract where an employee agrees not to compete with their employer, for instance, for working for a competitor for a specified period of time if the employee quits or is terminated. So, in California, under Business and Professions Code Section 16 600, noncompete agreements are not generally enforceable. But there are some limited statutory exceptions, and those include against existing employees or against the seller of a business. So it’s nothing new that non-compete agreements are generally not enforceable in California. But in September of this year, Governor Newsom signed SB 699 into law, which will bolster California’s prohibition of non-compete agreements. Ryan, can you tell me a little bit about SB 699?
Ryan:Sure. So, SB 699 is brand new law. It’s going to go into effect on January 1, 2024. It’s going to be codified into the business and professionals code section. And essentially, what it does, it codifies some existing law and also extends the reach of California’s restriction on non-compete agreements in several substantial ways. So, first, the new law provides that any contract that would be void under Business and Professions Code 1600, which is the old law that that is unenforceable even if the agreement was signed out of state under SB 699. In addition, it also prohibits employers and former employers from attempting to enforce a contract that is void regardless of whether the contract was signed and the employment was maintained outside of California. In addition, SB 699 prohibits employers from entering into a contract with a job applicant or employee that includes a provision that is unenforceable under section 16 600. And finally, and perhaps most significantly, in addition to the fact this is now reaching out of state, SB 699 creates a private right of action for employees, former employees, prospective employees, to sue their employers and any employer who violates the statute.
And should they prevail, they can recover their actual damages, they can obtain injunctive relief, they can obtain attorney’s fees. So while employers primary risk used to be that their non competes wouldn’t be enforceable under SB 699, this creates the additional liability for employers for merely entering into the unenforceable non-compete agreement in the first place. So, Nikki, are there any other takeaways that employers should be aware of?
Nikki:Yeah. So with SB 699 coming into effect in 2024, California employers face greater risks when having employees sign these non-compete agreements or seeking to enforce such agreements. So employers should really make sure to review their employee contracts and practices and ensure they comply with this business and profession. Code section 1616 600.5. Of course, if faced with any questions, it’s always a good idea to contact Council.
Ryan:Thanks so much, Nikki. And thank you all joining us today. That does it for this presentation. And you can continue to find California employment news on our blog at thelelawblog.com and wherever you listen to your favorite podcasts. And we’ll see you next time. Thank you.
The use of AI in the workplace can help streamline many tasks, but it can also come with potential discrimination concerns for employers. Meagan Bainbridge and Lukas Clary review some of these concerns and share best practices for employers in this episode of California Employment News.
Watch this episode on the Weintraub YouTube channel here.
Find part one of this two-part series here.
Show Notes:Meagan:Hello, everyone. Thank you for joining us for this installment of the California Employment News, an informative video and podcast resource offered by the Labor and Employment Group at Weintraub Tobin. My name is Meagan Bainbridge, and I’m a shareholder in the firm’s Labor and Employment group. Today, I am joined by my colleague and partner, Lukas Clary, for the second episode in our two-part series regarding artificial intelligence in the workplace. The first episode concentrated on what employers need to understand regarding AI’s implication on privacy and intellectual property. Today, we’re going to focus on the potential discrimination concerns that can come out of the use of AI. Lukas, over the past few years, the EEOC has really led the charge for developing guidance with respect to the use of AI in the workplace. Why does the EEOC care so much?
Lukas:Thanks, Meagan. Good question. Well, when we think about what the EEOC is, at its core, it’s the federal agency tasked with enforcing Title VII. And Title VII generally prohibits employment discrimination based on a person’s race, color, religion, sex, or national origin. So how does that relate to the use of AI in the workplace? Well, Title VII not only prohibits intentional discrimination, but also what we call in the legal world, disparate impact discrimination. Disparate impact occurs when an employer policy or practice that is neutral on its face has the effect of disproportionately excluding persons based on their race, color, religion, sex, or national origin, or other protected characteristic that will be unlawful disparate impact discrimination unless the policy or practice is job related and consistent with a business necessity. Examples of how that might come about in AI is by use of tests or selection procedures to aid in hiring, compensation decisions, or promotion decisions. If use of an algorithmic decision-making tool has an adverse impact on individuals of a particular protected class, then use of the tool will violate Title VII unless the employer can show that such use is both job-related and consistent with the business necessity.
And then, even if it makes that showing, the employer will also need to show that there is not a less discriminatory alternative available. So, Meagan, how might this type of discrimination arise when employers use AI for decision-making?
Meagan:Well, yeah. So potential discrimination in automated systems may come from various sources, including problems with the data themselves or those data sets, transparency, or the simple fact that developers who are making this computer software and applications do not understand the context to which a particular program will be used. All of this can lead to unintended consequences and possible discrimination. For instance, AI can be biased, creating concerns of illegal discrimination depending on how the technology and data are used. In a well-reported case several years ago, Amazon developed and utilized a tool to review job applicants’ resumes. The company realized after implementing this tool that the system was not rating candidates for a software developer jobs and other such technical posts in a gender-neutral way. It found that the computer models were trained to vet applicants by observing patterns and resumes submitted from the company over a ten-year period, and historically, most of those came from men. As a result, women were unintentionally being screened out by the software. Obviously, that’s a problem.
Age bias is another problem employers must watch for when using AI. Last month, iTutor group agreed to pay $365,000 to more than 200 job applicants allegedly passed over because of their age. Specifically, the EEOC alleged that the software was designed to automatically reject female candidates over the age of 55 and male candidates over the age of 60. If true, this practice would clearly be illegal and discriminatory to individuals who are over the ages of 55 and 60. There are also significant concerns related to AI’s disparate impact on disabled individuals, especially with respect to reasonable accommodations. As we know, employers should consider whether an employee is able to perform the essential functions of a particular job with or without a reasonable accommodation. But what happens when the employer does not provide a reasonable accommodation that is necessary for a job applicant or employee to be rated fairly and accurately by the algorithm? In such circumstances, the employer may be relying on an algorithmic decision-making tool that intentionally or unintentionally screens out an individual with a disability, even though the individual is able to do the job with or without a reasonable accommodation. So Lukas, what are employers going to do? Are there any ways they can use AI to help in the workplace without running afoul of the discrimination laws?
Lukas:Yes, absolutely there is. And I think it starts by employers auditing any AI tool they are using or considering using to determine if in fact that tool is having a disparate impact on any protected classes of either employees or applicants. If so, then the employer needs to ask, can we show that this practice is job related and consistent with the business necessity? And can we show that there is no less discriminatory alternative available? But if that audit reveals any problems when asking those questions, employers should consider what adjustments they might be able to make to eliminate those issues. For example, employers might want to work with IT to eliminate personal identifiers and unique data points about employees or applicants. These audits should also occur periodically rather than just at the outset, because AI platforms are constantly evolving, and so too can the risk for disparate impact problems. Employers should also develop clear policies that account for antidiscrimination concerns and make sure that AI users, the platform users, are aware of and trained around these policies. The policies should also contain a reporting mechanism when employees suspect violations. I think by taking those steps, employers gain the benefit of AI tools while effectively mitigating the discriminatory risks.
Meagan:Absolutely good advice, Lukas. And that does it for today. You can continue to find California Employment News on our blog at www.thelelawblog.com and wherever you listen to your favorite podcast. We’ll see you next time.
While AI has been a revolutionary development that can streamline and improve many workplace tasks, it also comes with legal hurdles that need to be carefully navigated. Meagan Bainbridge and Lukas Clary review some of the potential intellectual property and privacy concerns that can come about when employees use AI for work purposes in this episode of California Employment News.
Watch this episode on the Weintraub YouTube channel here.
Find part two of this two-part series here.
Show Notes:Lukas:Hello, everyone. Thank you for joining us for this installment of the California Employment News, an informative video and podcast resource offered by the Labor and Employment Group at Weintraub Tobin. My name is Lukas Clary. I’m a shareholder in the firm’s Labor and Employment Group. I am joined today by my partner, Meagan Bainbridge, who is also a partner in the Labor and Employment Group, for the first episode of our two-part series regarding artificial intelligence in the workplace. While AI has been a revolutionary development that can streamline and improve many workplace tasks, it also comes with some legal hurdles that need to be carefully navigated. Today, we’re going to focus on a couple of those potential intellectual property and privacy concerns that can come about when employees use AI for work purposes. Meagan, before we dive too far into that, I think it would help to start with just a brief overview of the various ways employers can use AI.
Meagan:Yeah, that would be helpful. And we should actually first explore what is actually considered AI. Congress defined AI to mean a machine-based system that can, for a given set of human defined objectives, make predictions, recommendations, or decisions influence real or virtual environments. That’s just a lot of words to essentially mean in the employment context. Using AI has typically meant that a developer relies partly on the computer’s own analysis of data to determine what criteria to use when making decisions. One of the ways employers have begun to utilize AI the most is with recruiting and hiring decisions. For instance, there are virtual assistants or chat bots that ask job candidates about their qualifications and reject those who do not meet predefined requirements. There’s video interviewing software that can evaluate candidates based on facial expressions and speech patterns. And there’s testing software that provides job fit scores for applicants or employees regarding their personalities, aptitudes, cognitive skills, or perceived cultural fit based on their performance on a game or a more traditional test. There’s also computer software and apps to use AI with to help performance management, aid employers with learning and developing development, tracking efficiency, determining pay scales, and monitoring employee satisfaction.
In many ways, AI can make employers’ lives easier, as there are automated methods that can take place of work previously done by humans. But with the good often comes the not so good. Lukas, can you tell us a little bit about some of the concerns employers should have using AI in the workplace as it relates to privacy and intellectual property issues?
Lukas:Right. Well, I think both privacy and intellectual property concerns start from similar places. So the first issue we have to think about is what information are employees putting into the AI platforms they are using? So AI relies on access to a vast amount of information for it to function properly, and employees may be uploading information to these platforms that will aid them in carrying out certain tasks. So, for example, employees might provide the platform with voluminous material and ask AI to summarize that material. Or employees might provide some type of source code or confidential code or some other confidential material and ask AI to do things like use that information, repair something, or improve the product. From an intellectual property perspective, the concern is that AI models will often store and use information that is uploaded to them to improve its own functionality. So once you put the information in there, once employees put the information in there, it is there for others to access as well. So if you are uploading confidential or trade secret information, you risk allowing others access to that and also losing the right to call it a protected trade secret at all.
Similarly, from a privacy perspective, there could be information uploaded that contains personal Identifiers and other sensitive information about others, whether it’s employees or consumers. If others gain access to this information, it could increase the risk for things like identity fraud and cyberbullying. So this is something that has to be closely and carefully monitored. Another concern is that you could risk violating employee privacy through use of AI technology to monitor things like keystrokes or facial recognition technology to observe time in front of a computer monitor. If employees are not made aware that this is going on a quarter, government agency could potentially view that as an unlawful privacy intrusion. Finally, on the other end of the spectrum, there are intellectual property concerns associated with using the information that AI churns out. We have already seen some lawsuits against AI companies by artists and others who claim that AI used their copyright or patented information without authorization. These types of claims could potentially extend to businesses who use the same information, including for today’s purposes. When employees use such information within the scope of their responsibilities, and that liability then extends to the employer. So these are the types of privacy and confidentiality concerns that can arise through the use of AI in the workplace.
That does not mean that we should necessarily avoid AI or forbid employees from using them. I still believe the benefits of AI in the workplace still vastly outweigh the risks, so it’s a good product to have available. We just need to make sure employers take these risks into account while implementing AI. So, Meagan, with that said, are there some practical tips and best practices you would recommend to employers who are navigating these issues?
Meagan:Yeah, well, first, employers should develop policies around the use of AI by employees. Notes will cover the antidiscrimination, which we’ll talk about on the next episode. Privacy and intellectual property concerns we are discussing in this series. Policies should clearly prohibit the use of AI without authorization and notice as to what AI the employee is using. This policy should include recording points for suspected violations and that sort of thing. Employers should also work with their It departments to determine how any AI is being used and treated as confidential information and trade secrets, and to also monitor and control who in the company has access to data and how it is being used.
Lukas:Thanks Meagan. Great tips, really helpful. So that’s going to do it for today. Please join us again for the second part of this series, where we will focus on potential issues that could arise regarding discrimination laws when AI is used in the workplace. In the meantime, you can also continue to find California employment news on our blog at www.thelelawblog.com and wherever you listen to your favorite podcasts. Thanks, and we’ll see you next time.
California will see an increase to minimum wage in January 2024 and has already seen some minimum wage increases in individual jurisdictions earlier this year. Nikki Mahmoudi and Tomiwa Aina review these changes in this episode of California Employment News.
Watch this episode on the Weintraub YouTube channel here.
Show Notes:Nikki:Hi everyone. Thank you for joining us for this installment of California Employment News, an informative video resource offered by the Labor and Employment Group here at Weintraub Tobin. My name is Nikki Mahmoudi, and I’m an associate in the group. I’m joined today by Tomiwa Aina, another associate in the group. Today we will be discussing the increases in California minimum wages.
So, beginning in 2024, California’s minimum wage will increase from $15.50 to $16. And the reason that this is happening is the California Department of Finance explained that the minimum wage needed to rise to account for inflation. However, since local jurisdiction minimum wages are often higher than the state minimum wage, we want to go with that higher number.
In fact, on July 1, 2023, there were increases in the minimum wages in various jurisdictions. Tomiwa, could you tell me more about this?
Tomiwa:Sure, Nikki. So, some examples of adjustments of the minimum wage rates in certain jurisdictions include Alameda County, where the minimum wage increased from $15.75 to $16.52. In the city of Los Angeles, the minimum wage increased from $16.04 to $16.78. And in Los Angeles County itself, the minimum wage increased from $15.96 to $16.92. In San Francisco, the minimum wage also increased from $16.99 to $18.07.
For more information on updates to minimum wage laws by jurisdictions, please see our Labor and Employment Blog posted on June 7, 2023, which can be found at thelelawblog.com.
And now this is just a reminder. If your employee’s rate of pay is based on the minimum wage, these rates will impact any potential meal break or rest break premiums that your employees could be entitled to. So please make sure that your workplace posters relating to California’s minimum wage are updated.
Nikki:Thank you. That does it for today. You can continue to find California Employment News on our blog at thelelawblog.com and wherever you listen to your favorite podcast. We’ll see you next time.
When starting a business, there are many common employment issues to consider. Join Weintraub attorneys Meagan Bainbridge and Ryan Abernethy in Part Two of their Employment Start-Up Kit for Start-Ups series for California Employment News, where they cover employee payroll, HR, and other important things for new businesses to consider to limit liability.
Listen to Part One of this Two-Part Series here.
Watch this episode on the Weintraub YouTube channel here.
Show Notes:Meagan:Hello, everyone. Thank you for joining us for this installment of California Employment News, an informative video podcast resource offered by the Labor and Employment Group at Weintraub Tobin. My name is Meagan Bainbridge, and I’m a shareholder in the firm’s labor and employment group. And today I’m joined by my colleague Ryan Abernethy for the second episode of our two-part series regarding employment policies for startups. The first episode concentrated on the importance of properly determining employee classifications to avoid future liability. Today we’re going to focus on the nuts and bolts of employing your very first employees. Ryan, what should startups know about paying its employees?
Ryan:Thanks, Meagan. The very first thing that a startup would need to do is to obtain what’s called the Employer Identification Number, or the Ein number. It’s also known as the Federal Tax Identification Number. And what an Ein does is it’s needed to pay employment taxes to hire employees, to open a bank account, to apply for business licenses and permits and all those things. It’s kind of a first step in the process here. The next step that’s highly recommended is that the startup consider retaining what’s called a payroll service company. And there’s a lot of options out there in the marketplace. But payroll service companies, they assist with payroll processing and management services, such as everything from tracking employee attendance to collecting wage and time information, calculating wages and payroll taxes, keeping electronic payroll records, setting and making direct deposits all the way to actually mailing out the tax information to the employees as well as their paychecks. A lot of things that would be very foreign to a startup that specialize in particular business but wants to be able to outsource some of these HR type work. But it’s important that the startup is aware that these service companies, they’re not your attorneys, and ultimately their problems and any issues that could be imputed to you in the form of liability.
We’ll share a quick war story here. Sometimes employers in California, they round employee time and clock in and clock out times to the nearest five-minute increment, for example. In most cases, that’s no longer lawful in California. But many payroll companies continue to list rounding as an option that they can select when they’re selecting the payroll services. And so this error alone can lead to hundreds of thousands of dollars in liability depending on the size of the company and how long it’s been in place. So again, that’s just one example of many as to why it’s still important to make sure that those errors, there are no errors at the onset and that you’re ready to go. And so it’s good to have maybe attorney review some of those things. Another thing that startups need to consider as maybe a third step, is to make sure their timekeeping system is in place. This is something that payroll services can often assist with and provide compliant meal and rest breaks. That’s a new universe for a lot of people. We have other episodes you can go back where we talk about the specific requirements. I won’t belabor this video with those, but feel free to go back and review those.
But essentially it’s a 30 minutes break for every 5 hours worked, and then ten minute rest break for every 4 hours worked, and then the minimum wage is another issue that startups need to consider quite right off the bat. When you have an employee and most people are familiar with the state and the federal minimum wage, but minimum wage can actually vary from city to city and county to county. So it’s really important that startups be aware of whatever applicable wage might be in effect. In addition, and lastly, here is, I guess, the remote workers issue. A lot of startups, we find they employ folks who are working in different states often, right? Even though they’re performing work for a California based company. It’s likely that the state’s employment laws would apply to wherever that employee is actually based. So again, that adds a wrinkle to make sure it’s ironed out at the onset when you’re starting up here. With that, Meagan’s going to share now some additional HR issues for startups to consider.
Meagan:Yeah, well, if it’s within the company’s financial ability, I always encourage new employers, startups included, to engage a human resources firm or an employment attorney to help get the company’s workers off the ground. Employing individuals in the state of California is difficult, and there are numerous factors that must be considered. Getting it right from the start will go a long way in reducing liability going forward. And first, new employers have to hire people, right? Oftentimes this means an employee or a potential employee will fill out an application. There are a lot of laws in California that restrict what information can be requested in that application. For instance, the California Fair Employment Practices Act provides that no pre-employment inquiries or specifications may be made concerning a job applicant’s protected class, so their race, religion, that sort of thing. Employers are also restricted from asking questions about criminal backgrounds and employment applications should not seek information about Social Security numbers or any other inherently private information. Second, new employers should use offer letters that set in an individual’s expectations for their employment. Offer letters should include a statement that the employment relationship is at will, which means either the company or the individual can terminate the employment relationship at any time.
It should also include such information as the start date, salary benefits, that sort of thing. Third, all new employers should create an employee handbook that lays out the company expectations and policies. Topics that should be included are, again, restate. The at will employment relationship language cannot say that too many times. It should include provisions for equal opportunity employment or equal employment opportunity employee Conduct Expectations rules Regarding Performance how is a performance going to be evaluated at the company, information regarding health and safety, workplace guidelines, and possibly leaves so kind of that general information. Fourth, each employee should be given a job description that includes the essential functions of the job as well as any other incidental job duties that will help frame the employee expectations. It also serves as really valuable information for when it comes to maybe evaluating employee performance, providing accommodations and that sort of thing. Ryan what else should employers consider as their startup grows?
Ryan:Yeah, so startups inherently, they start with a few and they grow and they get more employees. And as a startup gets more employees, they’ll find more employment laws start to apply to them. That’s because the applicability of most employment laws is dependent on the number of employees a business has. So a single new hire, so your 50th employee you hire, for instance, can trigger a whole new host of laws that apply to all employees. Right. So it’s critical that startups kind of are gaging this and understanding what laws apply as they grow. It’s also important for startups to really create consistent performance review programs based on objective criteria. So, as you’ve probably gathered so far, thorough documentation is very critical for all employers, and performance reviews are no different. And startups should create consistent performance reviews and a program that’s based on, again, objective, preferably, well documented criteria, and that’s the most likely to prevent lawsuits. In addition, on that theme, the importance of properly training supervisors cannot be overstated here, by giving managers and supervisors the authority to act on behalf of the company, their mistakes, their wrongful conduct is yours, it’s the company’s.
So, for instance, if a manager isn’t providing subordinates with compliant rest breaks or they’re calculating overtime incorrectly, it’s as if the company is doing it because they were endowed with that power, so to speak. And so all their liability passes through them and directly goes to the company. So you can’t point and say it’s their fault. It will be the company’s fault at the end of the day. So, again, that’s very important to make sure that managers are properly trained from the get go.
Meagan:Excellent advice. Ryan and that does it for today. As we’ve seen in this series, California startups operate in a dynamic and ever evolving employment legal landscape. Staying informed on potential illegal challenges will help ensure a solid foundation for your startup success. You can continue to find California employment news on our law blog at thelelawblog.com and wherever you listen to your favorite podcasts. We’ll see you next time.
There are many common employment issues that start-ups might face. Weintraub attorneys Meagan Bainbridge and Ryan Abernethy help review these issues in a two-part series for California Employment News. Join them in part one, which covers independent contractor classification and employment exemptions.
Watch this episode on the Weintraub YouTube channel here.
Show Notes: Ryan:Welcome to the latest episode of California Employment News, a video podcast series from Weintraub Tobin’s Labor and Employment Group. I’m Ryan Abernethy, an employment attorney here at Weintraub Tobin, and joining me today is my colleague and shareholder here at Weintraub, Meagan Bainbridge. So this is the first episode of a two-part series that we’ve put together for startup companies, where we’ll be delving into some of the most common employment issues that California startups face. So in this episode, we’ll be going over independent contractor classifications and employment exemption issues, which are kind of the first steps that a startup faces. And then in the next episode, we’ll cover the obligations that apply to employees in California and some best practices for startups to comply with those laws in order to avoid lawsuits. So, Meagan, can you tell us a bit about how to distinguish between independent contractors and employees?
Meagan:Yes, of course. Thanks, Ryan. Before hiring anyone, the first thing a startup must do is determine whether they are hiring employees or independent contractors. The key difference between an employee and an independent contractor for purposes of today’s discussion, is how that worker is paid. In the case of an employee, the employer issues form W2 and is required to withhold federal and California employment taxes on the wages independent contractors are paid subject to various other laws. In the many years that Ryan and I have been doing this, I think we’ve both seen a tendency from startups to label its initial workers as independent contractors as they work to start up the business. While certainly we understand this logic, it’s important for all new employers to understand that, well, at least in California, the assumption is that all individuals who do work for an employer should be classified as employees. In recent years, the state has taken a strong stand against the independent contractor classification, and in doing so has passed new laws making it increasingly difficult to classify any person as an independent contractor. In fact, it doesn’t matter if both the company and the employee desire to classify an individual as an independent contractor.
The only thing that matters is whether the ABC test can be met. This means that under the current law, any worker who meets the following criteria is presumed under California law to be an employee. First, that the worker is free from control and direction of the company and performing their work. This means that a business doesn’t control the precise manner or details of the work being completed, and that the individual is largely dictated or largely dictates how the work is performed. Number two, the worker performs a function that is not within the company’s typical business. Typically, we find this is the most difficult element to establish, in that proving that the worker is not performing a function inside the company’s typical business. A common example of where services are not considered to be part of the hiring entity’s usual course of business would be an example, such as where a retail store hires an outside plumber to fix a leak in the bathroom. That work that the plumber is performing is outside the scope of that retail store. On the other hand, if a clothing manufacturer hires a seamstress to work from home making designs to then sell in the retail store, then that likely would be work performed within the scope of that company’s typical business.
In number three, the worker frequently engages in that same function independently or as a trade or business with others. In other words, here, the individual operates as their own business and performs similar work for others. The difficult part here is that you often will have no control as to whether or not that individual actually does perform work to others. And if they don’t, that can render the individual an employee through no fault of yours, of course, because nothing’s easy. The legislature has laid out a few exemptions to this presumption. Ryan, can you tell us a little bit more about those exemptions?
Ryan:Yeah, so the ABC test freaked out a lot of companies, understandably, and startups weren’t exempt from that. But fortunately, the California legislature has, over time, kind of siloed off certain types of relationships and certain categories of industries and whatnot that are considered exempt from the ABC test, and I’ll go through some of those. The first one is what’s called the professional services exemption. And this exemption covers outsourced work from marketing professionals, for example, HR administrators, digital content aggregators, payment processing agents, and several other types of workers of that nature. Those who are all exempt from the ABC test, provided they also meet a separate six factor test, which I’m not going to go over today. There’s also referral agency exemption, and that tracks with the business model of many tech and app-based startups that Meagan and I have seen. This referral agency exemption applies to specific areas, including but not limited to graphic designers, photography, web design, even dog walking, and several other referral-based services, provided they meet a separate eleven-factor test in that instance, which, again, we won’t be going over today. In addition, the business to business exemption is one that many startup models can utilize, provided they meet certain criteria.
Unlike the other exemptions we’ve talked about, this exemption is not limited on the workers performing specific types of services. It applies to individuals who conduct business as sole proprietors or partners in a partnership, members of a limited liability companies, and to corporations generally. The legislature has also identified several specific industries that are now generally exempt from the ABC test. For instance, freelance writers and editors. They can qualify if they meet several additional requirements app-based ride shares and delivery services, certain real estate agents, construction subcontractors, and contracts for various single engagement events. But something to understand for each one of these exemptions is that in almost all instances, even when one of the exemptions apply to the ABC test, the startup must still show that the old Borello test still applies. And what the Borello test is, it’s basically part A of what Meagan went over. It’s the degree of control. So they want to make sure that under the old standard, that the company isn’t exerting too much control over that worker, such that it looks more like an employment relationship. When in doubt. I mentioned all these factors and considerations and various tests before they apply.
So when in doubt again, it’s best to speak with an attorney on these issues. So now that we know how to determine who are workers and who are employees, Meagan, how can startups determine which employees are exempt and which are non-exempt?
Meagan:Yeah, so once you’ve determined you have an employee and not an independent contractor, the next step is to determine whether the employee is exempt or nonexempt. The key difference between exempt and nonexempt employees is that nonexempt workers are entitled to certain protections under the laws that set minimum wage, overtime requirements, mail and arrest breaks, things like that. Both under California and federal law. It’s important to understand that the presumption is that all employees are non-exempt unless you can establish that they meet a certain exemption. The most common exemptions include the executive exemption, administrative exemption, exemptions for outside and inside salespersons and computer professionals. Each of these exemptions, of course, has its own set of strict factors that must be met. It’s not enough simply to say, hey, that person’s an exempt employee. You actually have to prove that they are. My partner, Lucas Clary and I just finished an expansive four-episode series totally focused on these pay exemptions, and I encourage you to check those out if you think you might have employees to qualify otherwise. That does it for today. As you’ve seen, California startups operate in a dynamic and ever-evolving employment legal landscape.
And by staying informed about worker classifications, you can proactively address potential legal challenges and ensure a solid foundation for your startup success. Please join us for the second part of this series while we will discuss the nuts and bolts of employing people in compliance with the California Labor Code and other relevant employment laws. You can continue to find the California Employment News on our blog at theLElawblog.com and wherever you listen to your favorite podcast. We’ll see you next time.
While some pay exemptions are fairly well-known, there are some, such as the Computer Professional and Sales exemptions, that are not as common. Meagan Bainbridge and Lukas Clary close out the pay exemptions series on California Employment News with this episode reviewing these two lesser known pay exemptions.
Watch this episode on the Weintraub YouTube channel here.
Show Notes: Lukas:Hello, everyone. Thank you for joining us for this installment of the California Employment News, an informative video and podcast resource offered by the Labor and Employment Group at Weintraub Tobin. My name is Lukas Clary. I’m a shareholder in the firm’s labor and employment group. I’m joined today by my partner, Meagan Bainbridge, and we are today concluding our series on exemptions by discussing a couple of the lesser known exemptions from federal and state overtime, meal and rest, break and minimum wage laws. Specifically, the computer professional exemption and the sales exemptions. Meagan, let’s start with the computer professional exemption. What can you tell our listeners about that one?
Meagan:Well, to start, exempt computer professionals must work on or with computers as their primary duty. This extends beyond the use of a computer as a daily function and refers to those who are directly working with, creating or altering computer technologies, such as operating systems and software. In order to meet this exemption, the employee must meet both the salary test and the job duties test. As we’ve discussed in previous episodes, to meet the salary test in 2023, California employers must compensate their employees a certain salary. For computer professional employees, this annual salary is $112,065.20. This equals no less than $53.80 an hour. If you’ll recall, this is substantially more than the other exemptions we’ve been discussing. If the salary test can be met, the employee then must meet the job duties test. Part one of the test says that the worker qualifies as a computer professional if the worker is, one, primarily engaged in the intellectual or creative work that requires the exercise of discretion and independent judgment, and two, is highly skilled and is highly proficient in the theoretical and practical application of highly specialized information to computer systems analysis, computer software programs, or software engineering.
And then part two of the duties test says that the worker is exempt if the primary duties consist of one or more of the following: the application of systems analysis, techniques, and procedures; the design, development, testing or modification of computer systems or programs; and three the documentation, creation, or modification of computer programs related to the design software or computer hardware or related equipment for computer and machines operating systems. The employee must pass both these part one and part two of the job duties test for the employee to be labeled a computer professional. What this really means is that an employee involved in general It support, such as installing software, configuring hard drives and troubleshooting issues, likely is not going to meet the exemptions test. On the other hand, an employee who develops the software or is responsible for evaluating the entire It system and make recommendations based upon that examination, they may very well be able to meet the exemption. So that’s the computer professional exemption. Let’s move on to the sales exemptions. Lukas, what can you tell us about the outside sales exemption?
Lukas:Thanks, Meagan. So the outside sales exemption, like the name implies, is one that applies to certain employees in sales. Now, this exemption, unlike several of the others that we’ve discussed, does not have a salary requirement component to it. Instead, to meet this exemption, it’s pretty straightforward. Two things have to apply. One, the employee must be at least 18 years old, so the exemption will never apply to minors. And then second, the employee must customarily work at least 50% of their working time away from the employer’s place of business conducting sales. Now, conducting sales means selling tangible or intangible items or obtaining orders or contracts for products, services, or use of facilities. Now, importantly, when factoring in whether an employee spends at least 50% of their time on sales activities, California law, unlike federal law, does not permit employers to count any time spent on work that is incidental to the actual sales activities, such as collections and deliveries. So think of a sales employee who is out on a route who might also do their delivery and collection work. That time can’t be counted. So that’s an important nuance to keep in mind. And given nuances like this, I think this is one, again, that employers should work with legal counsel before determining whether that exemption applies.
Now, that’s outside sales. Meagan, we also have one called inside sales, which is a little bit different, right?
Meagan:Absolutely. And while the employees may have kind of similar positions and do similar things, the exemption for inside sales is actually quite different. And in my opinion, one of the trickier exemptions to understand. So, as you just suggested, with outside sales, getting legal counsel involved is never a bad idea. Here. This exemption is also known as the commission sales exemption and is applicable during a pay period in which a the employee earns more than 150% of the minimum wage b more than 50% of the employee’s compensation is derived from commissions and C. The employee works in the mercantile industry, which is covered by wage order seven or in a professional, technical, clerical, mechanical or other similar occupation that’s covered by wage order four. This is a little different than the FLSA. We’re an employee working in the retail and service industry, meaning they derive at least 75% of their annual sales revenue from goods or services, not for resale, and are recognized as a retail establishment for their industry. So here there’s some differences between the FLSA and the California law that you’ll want to look at before you even consider exempting someone based upon the inside sales exemption in order to qualify as a commission within the meaning of this exemption, incentive based compensation must be roughly proportional to an employee’s sales productivity.
In other words, if an employee earns a fixed amount of incentive compensation for achieving a particular milestone, this compensation does not include a commission. This is more likely referred to as a bonus. Rather, the commission earned must be directly related to the particular milestone reached there. Are a couple of additional nuances to this exemption that employers should note. First, the inside salesperson exemption exempts employers only from paying overtime. The exemption does not relieve employers from complying with other wage and hour laws, such as providing meal and rest breaks or keeping accurate time records. Second, commission sales employees must meet the exemption under both state and federal law during each pay period. This means you cannot look at an entire year of earnings you’re looking at each pay period to determine whether the exemption is met during that particular pay period. This takes quite a bit of administrative oversight. Finally, when state and federal law differ, the employer must apply the law more protective of the employee. For example, inside salespeople exempt from state law but not federal law must be paid weekly overtime, but not daily overtime, because federal law does not require the payment of daily overtime.
Lukas:Thanks, Meagan. Lot to digest there, but that’s it for now. That concludes our series on exemptions. We hope you found them valuable. You can continue to find our video series and podcasts through the Lelblog.com or on the Weintraub Tobin YouTube channel or other outlets you use to listen to your favorite podcasts. Thanks everyone for joining us, and we look forward to reconnecting with the next edition of California Employment News.
Two of the most common pay exemptions from federal and state overtime, meal and rest break, and minimum wage laws are the Professional and Administrative exemptions. Meagan Bainbridge and Lukas Clary detail how these two exemptions work in this episode of California Employment News.
Watch this episode on the Weintraub YouTube channel here.
Show Notes: LUKAS:Hello, everyone. Thank you for joining us for this installment of the California Employment News, an informative video and podcast resource offered by the labor and Employment Group at Weintraub Tobin. My name is Lukas Clary, and I’m a shareholder in the firm’s labor and employment group. I am joined today by my partner, Meagan Bainbridge. Today we are going to continue our series on exemptions, and we’ll be discussing a couple of the most common ones from federal and state overtime, meal and rest break and minimum wage laws. Those are the professional and administrative exemptions. Meagan, let’s start with the administrative exemption. What can you tell us about that?
MEAGAN:Thanks, Lukas. The administrative exemption is one of the so-called white-collar exemptions. To qualify for the administrative exemption, a California employer must show that the employee’s primary duty is office or non-manual work. And this generally doesn’t mean clerical work that they directly relate to the management and general business operations of the employer or the employer’s customers, and includes the exercise of discretion and independent judgment with respect to matters of significance. In addition to these requirements, an exempt administrative employee must be primarily engaged in, which means more than 50% of the time, one of the following duties that could be regularly and directly assisting a proprietor or an employee who is employed in a bona fide executive or administrative capacity performing specialized or technical work under only general supervision. That require special training or experience or knowledge or three, executing special assignments or tasks under only general supervision. Often, these types of roles are going to be related to human resources, accounting, quality control, maybe payroll or benefits management, and possibly even marketing positions. Lukas, what can you tell us about the professional exemption?
LUKAS:Right, so, the professional exemption can apply to employees who meet all of these requirements. First, they either must be licensed or certified by the State of California and primarily engaged in the practice of one of the following professions law, medicine, dentistry, optometry architecture, engineering, teaching, or accounting. Or in the absence of that, they must be primarily engaged in a quote, learned or artistic profession. This means they are performing work that either requires knowledge of an advanced type in a field of science or learning customarily acquired through prolonged and specialized study. So think master’s and doctorate degree level stuff, rather than skill gained through general education or training in the performance of routine processes. Or a third way, they must be performing work that is original and creative in character in a recognized field of artistic endeavor, the result of which primarily depends on invention, imagination, or talent of the employee. For the artistic professional exemption to apply, the work being performed must also be predominantly intellectual and varied in character. Think something that cannot be easily replicated in a short period of time, something that takes time and talent. Now, whether someone is a licensed, learned, or artistic professional, some other criteria must be met for all three.
So first, they must also earn a minimum salary of at least $1,240 per week, which translates to $64,480 per year. And that number is determined based on being double the minimum wage for a full-time employee, so it could go up at minimum wage increases in future years. Second, they must, like the administrative exemption that Meagan discussed, must customarily and regularly exercise discretion and independent judgment in performing their job. So that is the professional exemption.
MEAGAN:Thanks, Lukas. Well, that’s it for now. In our next episode, we’ll complete our examination of the exemptions under the FLSA and California Labor code by concentrating on the lesser known and utilized exemptions, including those for sales, employees and the computer professional. You can continue to find us on our blog at theleblog.com or wherever you listen to your favorite podcasts. Thank you for joining us today, and we look forward to seeing you next time on the California Employment News.
The executive pay exemption is one of three so-called “white-collar” pay exemptions that exempts certain employees from state and/or federal overtime, minimum wage, and meal and rest break requirements. Meagan Bainbridge and Lukas Clary review this exemption in part 2 of this 4-part pay exemption series on California Employment News.
Watch this episode on the Weintraub YouTube channel here.
Show Notes: Meagan:Hello, everyone. Thank you for joining us for this installment of California Employment News, an informative video and podcast resource offered by the labor and Employment Group at Weintraub Tobin. My name is Meagan Bainbridge, and I’m a shareholder in the Firm’s labor and employment group. Today, I’m joined by my partner, Lukas Clary, and we will be discussing the executive exemption and a new case out of the United States Supreme Court. Lukas, let’s start at the beginning. What is the executive exemption?
Lukas:Thanks, Meagan. So, the executive exemption is one of the three so-called white collar exemptions. These are exemptions from federal and state laws entitling employees to, for example, overtime, minimum wage, and, in California, meal and rest breaks. Certain employees are exempt from those requirements if they meet the applicable test for the exemption. Now, the executive exemption applies to certain managing employees whose job entails running the company or at least a customarily recognized subdivision of the company. There are criteria that must be met for the exemption to apply. While those criteria vary in nuanced ways, depending on whether you’re applying federal or California law, some aspects are common of both. For example, the executive must customarily direct the work of at least two or more full time employees. They must have the authority to hire and fire, or at least make recommendations on hiring and firing that are afforded significant weight. They must also be paid on a salary basis, and depending on federal or state law, that salary must be a minimum amount. It is that last point, the salary basis, that has been scrutinized in a recent Supreme Court opinion. Meagan, can you tell us about that?
Meagan:Yeah. So, in Helix Energy Solutions Group, Inc. vs. Hewitt, the Supreme Court clarified that employees who are paid a daily rate likely do not qualify for the executive exemption. Under the FLSA, Mr. Hewitt worked for Helix as a tool pusher on an offshore oil rig. He typically worked more than 80 hours a week. For this work. He earned over $200,000 a year. But he was paid a set daily rate with no overtime compensation. Mr. Hewitt argued that because the daily rate did not offer him a minimum guaranteed weekly pay, rather he was paid just for the days he worked, the salary basis test could not be met. The majority of the court agreed with him that the daily rate employee does not meet the salary basis test found in the language of the FLSA, where there’s no weekly minimum guaranteed pay. So, Lukas, what does this mean for employers?
Lukas: So, for starters, it means that employers must pay management employees at least a weekly set salary if they’re going to be classified as exempt. A daily rate will not work. Now, that salary also has to be above a certain minimum, as I mentioned earlier. And this is one area where California and federal law differ. So, in California, that minimum salary must be equivalent to double the minimum wage earned by a full-time employee, which is someone who works 40 hours per week. So, given California’s current minimum wage of $15.50 per hour, this means an employee must earn at least $1,240 per week, which is $31 an hour times 40 hours, to be eligible for the executive exemption. Another key distinction between California and federal law on this topic is that California utilizes a quantitative rather than qualitative analysis. In other words, whereas the FLSA federal law test asks whether the employee’s primary duty is to manage the enterprise or recognized subdivision, California law asks whether the employee is doing so, managing at least 50% of the time. If not, they will not qualify for the exemption, even if all other criteria are met. Given these nuances, Meagan, I do recommend employers considering classifying an employee as exempt work with legal counsel to ensure they are doing so correctly.
Meagan:Thanks, Lukas. That’s good advice. And that does it for today. Thank you for joining us. On the next episode, we’re going to continue with our series on exemptions and focus on the administrative and professional exemptions. You can continue to find California employment news on our blog at theleblog.com and wherever you listen to your favorite podcasts. We’ll see you next time.
Certain employees can be exempt from overtime pay and meal and rest breaks under both the FLSA and California Labor Law. Meagan Bainbridge and Lukas Clary break down the basics of pay exemptions in part 1 of this 4-part series for California Employment News.
Watch this episode on the Weintraub YouTube channel here.
The U.S. Department of Labor issued guidance earlier this year that reminds employers of the current rights of teleworking employees under both the FLSA and FMLA. Katie Collins reviews this guidance in this episode of California Employment News.
Watch this episode on the Weintraub YouTube channel here.
The recent 9th Circuit opinion in US Chamber of Commerce v. Bonta struck down AB 51, determining that it was preempted by the Federal Arbitration Act. Meagan Bainbridge and Lukas Clary review how this decision impacts the use of mandatory arbitration agreements for California employers in this episode of California Employment News.
Watch this episode on the Weintraub YouTube channel here.
As temperatures rise, California law requires employers with outdoor employees to take steps to protect workers from heat illness. Shauna Correia reviews Cal/OSHA’s ‘Heat Illness Prevention Standards” for outdoor worksites in this episode of California Employment News.
Watch this episode on the Weintraub YouTube channel here.
A new law mandates employers to provide appropriate military leave compensation for San Francisco employees while they are away for military duty. Katie Collins reviews the SF Military Leave Pay Protection Act in this episode of California Employment News.
Watch this episode on the Weintraub YouTube channel here.
State law requires that employers take steps to prevent and correct wrongful behaviors in the workplace, such as discrimination, harassment, and retaliation. Lizbeth (Beth) West explains what employers should know about mandatory harassment prevention training for non-supervisors and supervisors on this installment of California Employment News.
Watch this episode on the Weintraub YouTube channel here.
As we move through 2023, there are some key employment law cases to watch. See which cases top the watch lists for Meagan Bainbridge and Lukas Clary in this episode of California Employment News.
Watch this episode on the Weintraub YouTube channel here.
AB1041 recently expanded leave rights in California by adding a “designated person” to the list of people for whom an eligible employee may take time off to care for under both the CFRA and the HWHF Act. Lizbeth “Beth” West explains who can qualify as a designated person under each act, and how often employees may designate a person, in this episode of California Employment News.
Watch this episode on the Weintraub YouTube channel here.
Employee personnel files are an important aspect of any employer’s records. Meagan Bainbridge and Nikki Mahmoudi review the basics of employee personnel files, including what should and should not be included and handling inspection requests, in this episode of California Employment News.
Watch this episode on the Weintraub YouTube channel here.
Employee time attestations are a valuable way for employers to track missed and/or non-compliant meal and rest breaks. In this episode of California Employment News, Meagan Bainbridge and Katie Collins review how employers can use time attestations to their advantage.
Watch this episode on the Weintraub YouTube channel here.
Properly listing employer information on wage statements might seem like a no-brainer, but it can get tricky. Shauna Correia and Rachel Davey break down the details in this episode of California Employment News.
Part three of a three-part series on compliant wage statements in California.
Watch this episode on the Weintraub YouTube channel here.
Find part one here.
Find part two here.
California employers are subject to meal and rest break premiums. Shauna Correia and Rachel Davey help explain what premium payments are, and how employers are required to account for them on wage statements, in this part 2 of the 3-part wage statement compliance series on California Employment News.
Watch this episode on the Weintraub YouTube channel here.
Wage statements might seem straightforward, but employers who make mistakes on them could face PAGA claims or class-action lawsuits as a result. Join Shauna Correia and Rachel Davey from Weintraub’s Labor & Employment group as they review the basics of wage statement compliance in California in part one of this three-part series from California Employment News.
Watch this episode here.
Recent case law has brought time rounding policies into question. In this episode of California Employment News, Meagan Bainbridge and Katie Collins review the California Court of Appeal’s recent ruling in Camp v. Home Depot, and discuss how it could impact time rounding policies for California employers.
Watch this episode here.
California Labor Code now guarantees meal and rest breaks for public healthcare workers. In this episode of California Employment News, Meagan Bainbridge and Katie Collins review the details of the newly added Labor Code Section 512.1 and how it applies to both public healthcare employees and employers.
Watch this episode here.
With the holiday season upon us, there are some important tips for employers to keep in mind for holiday gatherings and celebrations. Meagan Bainbridge and Nikki Mahmoudi discuss these best practices in this special edition of California Employment News.
Watch this episode here.
New California legislation will require employee handbooks to be updated by January 2023. Meagan Bainbridge and Katie Collins discuss these updates and best practices for employers as they navigate the changes in this episode of California Employment News.
Watch this episode here.
COVID-19 Supplemental Paid Sick Leave has been extended through December 31, 2022. Learn more about the expansion, including testing requirements and required notices to employees, in this episode of California Employment News with Meagan Bainbridge and Katie Collins.
Watch this episode here.
New pay transparency requirements are coming for California employers. Meagan Bainbridge and Katie Collins discuss the updates from SB 1162 and how they impact job postings, job descriptions, and more in this episode of California Employment News.
Watch this episode here.
In this episode of California Employment News, Lizbeth (Beth) West and Meagan Bainbridge present part four of the Workplace Investigation Series, discussing best practices for effectively memorializing the investigation in a report.
Watch this episode here.
In this episode of California Employment News, Lizbeth (Beth) West and Meagan Bainbridge present part three of the Workplace Investigation Series, discussing how to make reasonable investigative findings once all evidence is collected.
Watch this episode here.
In this episode of California Employment News, Lizbeth (Beth) West and Meagan Bainbridge present part two of the Workplace Investigation Series, discussing best practices for collecting information during a workplace investigation.
Watch this episode here.
In this episode of California Employment News, Lizbeth (Beth) West and Meagan Bainbridge present part one of the Workplace Investigation Series, discussing how to start an investigation following an employee complaint.
Watch the full episode here.
In this edition of California Employment News, Meagan Bainbridge and Lizbeth (Beth) West introduce a new four-part series about conducting effective and defensible workplace investigations and explain what each episode will cover.
Watch this episode here.
In this episode of California Employment News, Lukas Clary and Ryan Abernethy discuss the regular rate of pay, its unusual features, and the risks of employers getting it wrong.
Watch this episode here.
In this episode of California Employment News, Lukas Clary and Ryan Abernethy discuss best practices for employers to maintain employee records and the importance of record retention.
Watch this episode here.
In this episode of California Employment News, Ryan Abernethy and Lukas Clary discuss recent changes to the California Family Rights Act (CFRA) and what these changes mean for employers.
In this episode of California Employment News, Lukas Clary and Ryan Abernethy discuss best practices for employers to keep non-exempt employees in meal and rest break compliance.
In this episode of California Employment News, Lukas Clary and Meagan Bainbridge discuss the U.S. Supreme Court decision in Viking River Cruises, Inc. v Moriana holding that the Federal Arbitration Act (FAA) preempts the California law precluding division of individual and non-individual Private Attorneys General Act (PAGA) actions for purposes of compelling arbitration. Not only is arbitration of individual PAGA claims now in play, but employees may not have standing to pursue non-individual PAGA actions in court.
In this episode of California Employment News, Lukas Clary and Meagan Bainbridge discuss the best practices employers should follow when managing remote and hybrid employees.