I heard that the DLSE recently attempted to clarify some aspects of the new Paid Sick Leave law. What’s that about?

Q.     I heard that the DLSE recently attempted to clarify some aspects of the new Paid Sick Leave law. What’s that about?

A.     Back in June, the BMJ employment team identified some ambiguities presented in the new Paid Sick Leave law for a Fresno Business Journal article.  In short, the Paid Sick Leave law requires 24 hours or 3 days of paid sick leave.  Our article explored what “three days” means in the context of a alternative work schedule, such as when an employee works four 10-hour days. Below is a link to our original article.

http://www.bakermanock.com/sites/default/files/publications/Business%20Journal%20June%2026_15_New%20Paid%20Sick%20Leave%20Law_by%20Steven%20Crass.pdf

On August 7, 2015, the Department of Industrial Relations (“DLSE”) issued an opinion letter addressing the seminal question posed in our article.  In sum, the DLSE stated where an employee has a regular schedule that exceeds 8 hours a day, then the employer is required to provide the equivalent of three days of paid sick leave, even if the total sick leave would exceed 24 hours.  Accordingly, if an employee regularly works a 10-hour workday (as noted in our example above), then the employee is entitled to 30 hours of paid sick leave.  Below is a link to the opinion letter.

http://www.dir.ca.gov/dlse/opinions/2015.08.07.pdf

Unfortunately, the opinion letter did not address the more complex issues noted in the article, such as the situation where an employee does not have a “regular schedule” or if the employee does have a regular schedule, but it changes.  Until those issues (and a few others) are resolved, the Paid Sick Leave law will remain convoluted.

…..here at BMJ we are still sick and tired of the Paid Sick Leave law.

As an employer, do I need to pay my volunteers and interns?

Q.    Shouldn’t politicians be treated the same as private business?  This week Rick Perry announced that he has stopped paying his staff.  This is not new in political campaigns.  Hillary Clinton stopped paying some staff in 2008.  If my company begins to struggle, can I ask my employees to volunteer until we receive a new influx of cash?  Can I make them all interns?  How about independent contractors?

A.     The answer to all your questions is, no.   A private business that stopped paying its employees would face a host of penalties and violations.  Indeed, the private business owner could even be subject to criminal prosecution. (See Labor Code sections 1199 and 1199.5)  Although it is an open question, a political campaign may be able to have staff volunteer.  An individual is considered a volunteer if they donate their services, without contemplation of payment, for humanitarian, public service or religious reasons.  Arguably, working on a campaign is a public service.  That said, the Wage and Hour Division has never specifically determined it is.  They have, however, found a volunteer relationship in the following circumstances:

“(1) an individual volunteers his services to a nursing home; 2) members of a civic organization help out in a sheltered workshop; 3) a parent drives a school bus to transport a band or football team (4) an individual volunteers his services part time to a church to answer telephone or to perform general clerical, administrative or custodial duties; 5) an office employee of a hospital volunteers services to minister to comfort patients outside his regular working hours without accruing compensable working time, or volunteers services such as providing reading material to patients, reading to or playing with patients in pediatric wards, or similar activities directly related to a patients comfort, relaxation or entertainment; 6) a housewife donates services to a hospital as a secretary; or 7) the wife of a doctor volunteers a few hours each week as a nurse.”

(Richard Simmons, Wage and Hour Manuel for California Employers, Eighteenth Edition.)

Then, if a private employer cannot call them volunteers, how about making them interns?  The answer to that question is also, no.  In order to be an intern all six of the following must be met:  1) the training must be similar to that given in a vocational school; 2) the training must be for the benefit of the trainees or students; 3) the trainees or students must not displace regular employees but must work under their close observations; 4) the employer providing the training must derive no immediate advantage from the activities of the trainees and on occasion its operations actually be impeded; 5) the trainees or students must not necessarily be entitled to a job at the conclusion of the training period; and 6) the employer and the trainees must understand they are not entitled to wages.  This six prong test makes it difficult for any private business (or political campaign) to simply classify an individual as an intern.  Just ask Mary Kate and Ashley.

O.k. – if a private business can’t have volunteers or interns to do the work, how about calling them all independent contractors and just paying a small stipend??  Again, no.  This too, is most likely improper.  In order to be an independent contractor an individual must meet an 11 factor test.  This doesn’t generally work for businesses (or political campaigns).  For more information on independent contractors see my previous blog, http://wp.me/p67Lhq-1u

It is not easy running a business with fluctuating cash flow.  However, before any small business decides to forgo paying an employee, it would be best to be like Rick Perry and put on their smart black glasses and re-read this blog.  A call to your employment attorney may also be a good idea.

This Legal Update / Bulletin is for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. The hypothetical question is posed to illustrate a point and does not contemplate all potential legal considerations This update should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

My company depends on ag workers. What are some things that I need to be concerned about?

Q.     My company depends on ag workers.  What are some things that I need to be concerned about?

A.     Below are seven issues every employer of ag workers should consider:

1. Wage and Hour claims –  Agricultural employers are particularly susceptible to claims where an employer pays employees on a piece-rate basis, meaning the employees are paid per task or shift.  A fairly recent case found that employees must be paid for their time at work even when they are not engaged in piece-rate work.  These non piece-rate hours must be paid at least minimum wage, and these hours and wages should be clearly documented on the employee’s wage statement.  Also, this issue presents itself in situations where employees fail to reach at least minimum wage for each specific hour they work.  For example, if a piece-rate task is paid $50, but it takes the employee 8 hours to perform this task, this is a violation of the law.  As such, employers must carefully track employees’ time, hour by hour, and be cognizant of nonproductive hours (such as paid breaks, meetings, thawing, packing, cooling, etc.)

2. Immigration compliance – A recent law permitted undocumented immigrants to apply for drivers’ licenses.  However, California law also makes it illegal to discriminate against employees who present these licenses for employment.  But, what makes this confusing is that those licenses cannot be used to establish eligibility to work when completing the I-9.  Therefore, employers still need to require employees to provide documentation and follow the federal I-9 process to determine employees’ authorization to work.

3. Heat illness prevention – A fairly new regulation regarding heat illness prevention puts new burdens on employers.  Most notably the new regulations changed the minimum temperatures dictating when and how shade must be provided.  For additional information on heat illness, see our recent blog post further discussing the issue.

4. Employee Housing – Generally, if you provide housing for at least 5 employees, a permit for employee housing is required.  This permit can be obtained from the Department of Housing and Community Development.  There are fees associated with the permit — approximately $200 for issuance and $27 per employee housed.  Also, there is a lengthy list of requirements regarding the condition of the housing, which will be subject to inspections.  The permit must be obtained at least 45 days prior to housing the employees.

5. Concerted activity – Both the National Labor Relations Board (NLRB) and the Agricultural Labor Relations Board (ALRB) have recently taken a broader view of their jurisdiction.  While traditionally these agencies focused on unionizing, “concerted activity” has a much broader definition.  Both agencies derive their jurisdiction as a means to protect “concerted activity.”  As such, agricultural employers need to be careful not to take adverse employment actions against employees who are discussing working conditions.  There can be a delicate line between complaints and protected speech (e.g. concerted activity).  If the employer crosses that delicate line, an employee may file a claim with the NLRB or ALRB.

6. Joint Employer – A recent law makes an employer jointly liable with a labor contractor for wages and workers’ compensation violations.  Employers must now pay special attention to ensure that their labor contractors are complying with all laws.  They may also want to consider indemnification agreements in any contract.  In the end, agricultural employers who originally thought they had assigned the ultimate responsibility for those workers to a labor contractor may find themselves nonetheless a party to a lawsuit – and ultimately liable!

7. Sexual harassment and discrimination – While not new, these claims continue to be filed.  Because of the nature of agricultural work, employees are often not in a central location, and therefore, supervision can be difficult.  Employers are strictly liable for sexual harassment committed by their supervisors, as well as conduct that is severe and pervasive.  As such, agricultural employers must choose their supervisors carefully, have clear policies prohibiting such conduct, and conduct all necessary training.  Also, remember that discrimination can be alleged even between employees from the same country.  It is not uncommon to have discrimination claims brought by employees from different regions in the same country or different countries in the same area of the world.

This Legal Update / Bulletin is for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. The hypothetical question is posed to illustrate a point and does not contemplate all potential legal considerations This update should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

I’m leaving my business and becoming a politician like Donald Trump. How do I successfully tell my employees, “you’re fired?”

Q.     The GOP debate last night really inspired me. I think it’s time to shut-down my small, local business and go into politics. If The Donald can do it, anyone can, right?? So, next week, I am going to shut my business doors and let each of my five employees know, “you’re fired.” To make their lives a little easier, I would like to offer them some severance pay, say $5,000.00 each. Any advice??

A.     Yes, follow the Donald’s advice and don’t give your money away for free. It’s understandable that you want to help your employees, but you also need to ensure that they don’t file a lawsuit. Accordingly, in return for your company’s money, you will also want to require that the employee sign a severance agreement with a full settlement and release.  This agreement will waive most employment related claims that an employee may have.  The most notable claims that a severance agreement cannot cover are workers’ compensation claims and claims that the employer did not pay all wages during the employee’s time of employment.  In addition, in order to avoid a discrimination claim, the best type of offer would be a standing offer made to all your employees with no pressure that specific employees take the money and leave.  That makes sense because your company would want to avoid any claim that you are only targeting a certain type of protected employees, such as employees over forty years old.

Severance agreements with a settlement and release are rarely a bad idea.  Although, as noted above, they don’t protect your company against all claims. However, if the employee signs the agreement, you can rest assured that you are protected against the large majority of employee-related claims.

There are some other issues with a business closure (i.e. the WARN Act and California Labor Code section 1400 et seq.) that may require you to provide a 60 day notice of the closure of your business to all employees. However, those requirements are only for larger companies that employ 75 or more employees and are terminating 50 or more employees within 30 days.

Good luck with politics.  If last night was any sign of what the future holds, we are in for a big showdown in the upcoming election year.  Let’s just hope whoever is elected makes progress helping businesses . . . ’til then, we are here to answer your questions.

This Legal Update / Bulletin is for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. The hypothetical question is posed to illustrate a point and does not contemplate all potential legal considerations This update should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.