FACT CHECK: Is Bernie Sanders right? Does the U.S. fail to provide paid pregnancy leave?

Q:     FACT CHECK:  Is Bernie Sanders right?  Does the U.S. fail to provide paid Pregnancy Leave?

A:     This week, Democratic presidential candidate, Bernie Sanders, tweeted that China provides 14 weeks of paid maternity leave, while the U.S. provides none.  Actor James Wood did not like the tweet and called Sanders a moron[1].  That said, Sanders’ tweet is partially true, albeit somewhat disingenuous.  There are a rubric of Federal and State laws that protect both expecting and new mothers.  In California, if an employee qualifies for CFRA[2], FMLA[3]  and PDL[4] then the employee may be eligible for up to 6.7 months of time off.  Even in instances, where an employee does not qualify for CFRA and FMLA, an employee would still be eligible for up to four months of leave.  Whether the employee is eligible for 6.7 months or 4 months, she could also be entitled to additional time off under the ADA[5] or FEHA[6]..

As far as compensation during the leave, both Federal and State law require employers to continue to pay for health and life insurance premium payments and, if applicable, pension accrual and profit sharing plans (albeit not salary).  These laws also permit the employee to choose whether she wants to use any sick or accrued vacation leave during her time away. In California, employees are provided income replacement through SDI[7] or PFL[8].  This, in essence, is paid maternity leave.

In short, pregnancy leave is complicated and almost impossible to reduce to a 140-word campaign tweet (or even a short blog).   There are many different laws protecting both expecting and new mothers.  To say the United States does not provide paid maternity leave ignores the fact that the United States operates in a Federal system in which individual states are left to draft laws which best protect their own citizenry.  As noted, California, like some other states, does provide wage replacement for those on maternity and baby bonding leave.  Both Federal and State law also require the continued payment of benefits during this leave.  However, Bernie Sanders is technically correct that there is no Federal law that provides for payment of an employee’s salary during maternity.  That said, his comment does not account for benefits administered by the States.

[1] http://www.cnn.com/2015/10/20/politics/james-woods-bernie-sanders-twitter/index.html

[2] The California Family Rights act (CFRA) (Gov. Code section 12945.2)

[3] Family Medical Leave Act of 1993

[4] Pregnancy Disability Leave

[5] Americans with Disabilities Act

[6] The Fair Employment and Housing Act (FEHA) (Gov. Code section 12940 et. seq.)

[7] State Disability Insurance

[8] Paid Family Leave

What can you tell me about California’s new Fair Pay Act? Will Gwyneth Paltrow finally be paid as much as Robert Downey, Jr.?

Q:     Well, it’s the time of year when we learn which bills become laws and make it even harder to be an employer in California. I have heard quite a bit about this new Fair Pay Act regarding gender pay equality. What does “substantially similar” mean, and what impact will the newly signed Fair Pay Act have on employers?

A:     Well, we are about to find out…. We have famously heard from actress Gwyneth Paltrow about the “painful” wage gap,[1] and it seems her plight has not fallen on deaf ears. Earlier this week, the Governor signed into law what has been deemed the country’s most stringent law regulating gender-based wage disparities. California’s new Fair Pay Act (“the Act”) now requires that an employee be paid equal to any counterpart of the opposite sex who performs “substantially similar work,” rather than just equal work. This requirement applies even when the employees work at different sites or have different titles.

While the aim of the law is certainly commendable, the standard will be likely difficult to apply. This makes sense because the Act does not define “substantially similar work.” As a result, its meaning and potential impact remains unclear. What we do know is that, in theory, the Act will make it easier for employees to sue their employers if they feel they are undercompensated. It will also be more difficult for employers to prove that wage gaps are not discriminatory. The Act shifts the burden from employees to employer to demonstrate that the wage differential is determined by a system based on seniority, merit, education, experience or other measures of quality. Further, even if the employer succeeds in demonstrating a non-discriminatory reason, the aggrieved employee can argue that business could have been run differently to avoid said pay discrepancy.

Geoffrey DeBoskey, head of Sidley Austin’s Los Angeles labor and employment group, implied that the Act, while drafted with pure intentions, presents a risk of drawn out and costly litigation for employers, and ultimately, leaves it to “judges and juries” to “second-guess business decisions.”[2] In contrast, Cliff Palefsky, a San Francisco plaintiffs’ employment attorney with McGuinn, Hillsman & Palefsky, does not expect the Act to cause substantial increase in litigation. This is because, Palefsky said, most “gender-bias cases involve discriminatory promotion practices, rather than unfair pay.”

Whether the Act will cause new discrimination victims to flood the courthouse, or simply a trickle, is yet to be determined. Unfortunately, until “substantially similar” is clarified by the Legislature or interpreted by the Court, eager Californians will be left to wonder, “[w]ill Jennifer Lawrence get paid like Bradley Cooper?” [3]

In unrelated news, I am currently lobbying Sacramento for the Attorney’s Pay Equalization With Hollywood Movie Actress Gwyneth Paltrow Act – commonly referred to by its acronym as the APEWHMAGPA.

[1] http://www.harpersbazaar.com/celebrity/latest/news/a12496/gwenyth-paltrow-pay-gap/

[2] Marisa Kendall. “Employment Lawyers Brace for Fair Pay Act.” The Recorder [San Francisco] 6 Oct. 2015. Web.

[3] Daniel Miller, Meg James, and Amy Kaufman. “With the New Fair Pay Act, Will Jennifer Lawrence Get Paid as Much as Bradley Cooper?” Los Angeles Times. Los Angeles Times, 08 Oct. 2015. Web.

I heard that the new “piece-rate” legislation on the Governer’s desk could cost California employers a lot of money. Is that true??

Q:     What is this about a new law affecting employers regarding “piece-rate,” rest breaks, and other unproductive time? I heard the Governor struck a deal.

A:     The new legislation is AB 1513. And, it potentially requires back payment to all workers that were paid “piece-rate” from July 2012 to December 31, 2015. It is currently on the Governor’s desk awaiting signature, but the Governor is touting the deal as positive.

Until fairly recently, there was a theory that an employer could pay an employee “piece-rate” so long as at the end of the day (or pay period) the employee made more than the minimum wage once the employer divided the compensation by the number of hours worked. However, two recent cases changed that idea.

In Gonzalez v. Downtown LA Motors (April 2, 2013), the court found that automobile service technicians who were paid on a “piece-rate” basis should have been paid their minimum hourly wage for the waiting time between repairs. The court found the employer (a Mercedes dealership) violated the California Labor Code through illegal “pay averaging” and the employer was required to pay a separate hourly rate for any time that the mechanics were not actively engaged in repairs.

Specifically, the court found that “[e]very employer shall pay to each employee, on the established payday for the period involved, not less than the applicable minimum wage for all hours worked in the payroll period, whether the remuneration is measured by time, piece, commission, or otherwise.” The court further noted that the applicable wage order at issue in the case also defined “hours worked” as “the time during which an employee is subject to the control of an employer, and includes all the time the employee is suffered or permitted to work, whether or not required to do so.” In short, the court found the obligation to pay minimum wage attaches to each and every separate hour worked during the payroll period.

The next battle ground was rest breaks.  Since rest breaks are unproductive but compensable time, one would think an employer can average the hour in which a break was taken.   In Bluford v. Safeway Stores Inc., the court said no.  As such, employers that utilize “piece-rate” pay should have an alternative method for paying for each 10 minute rest break.

After Gonzalez and Bluford, the general school of thought was that employers were required to pay a base minimum wage for all hours worked to which some form of “piece-rate” incentive would be added (either to each hour or at the end of the day).  Unfortunately, the only way to determine if an employee is receiving at least minimum wage for each hour is to know what he or she is earning each hour.  Gonzalez forecloses the possibility of a looking back to calculate whether employees are getting paid at least minimum wage.  The employee must earn at least minimum wage for all hours worked and be paid at least a minimum wage rate for his 10 minute rest breaks (or heat rest periods).

Because there is a three year statute of limitations for wage claims, the question then became: what do employers who paid “piece-rate” prior to Gonzalez and Bluford do? The answer: evidently, go to Sacramento and negotiate. On October 1, 2015, David Siders reported in the Fresno Bee that:

The Brown Administration, business and labor officials emerged from dozens of hours of private meetings and conference calls with a plan to resolve a festering dispute over pay for farm workers and other low wage labors. The solution, passed in a bill on the legislature’s final day, reflected a multi-million dollar compromise: In exchange for back payments to thousands of employees for rest periods and other work hours, farmers would receive protection from lawsuits – and potentially far stiffer penalties – for past failure to pay.

According to the language in the statute, the employer is now required to make the back payment in one of two ways: 1) pay the actual sums for each missed rest period together with accrued interest; or 2) pay each employee an amount equal to 4 percent of that employee’s gross earnings in pay periods in which any work was performed on a “piece-rate” basis from July 1, 2012, to December 31, 2015, inclusive, less amounts already paid to the employee, separate from piece-rate compensation. The issue with the first option is how does an employer calculate actual sums, when they did not think they were required to record unproductive time.

Under the AB 1513, there are some limited exceptions, and the amount and timing of the payments can be a little technical. Accordingly, all employers that paid “piece-rate” should contact their employment attorney prior to making any payments under this new legislation.