Identity Crisis: BMJ’s 2015 Employment Law Review

Here at the BMJ team, we are on the forefront of employment law developments.  As we wrap up the end of our year, it seems to be confirmed –we nailed it.

A recent story on CNN claims that “Identity” is the Dictionary.com 2015 word of the year.   http://www.cnn.com/2015/12/08/living/word-of-the-year-dictionary-com-feat/index.html

This development is not surprising to us.

See our blogs on identity:

Rachel Dolezal: http://wp.me/p67Lhq-1d and

and Caitlyn Jenner:  http://wp.me/p67Lhq-c

as well as our interview on Central Valley Today.  http://www.yourcentralvalley.com/story/d/story/racial-identity-vs-human-race/34097/lb2i6Z4b_UCOmDkLKXOmKQ

This is the first year with our new BMJ Employment Answers’ format.  As you are aware, in 2015 we began to identify as bloggers.  In 2016 we are rolling out our cool new twitter handle, @BMJemployment.  Follow us today!  We hope our new Twitter following will be as successful as our blog, which has now been viewed in over 30 countries worldwide!

That’s a wrap for us in 2015.  May your holiday season be merry and bright and your new year be free from legal fights.

-The BMJ Employment Answers Team

Will USC get hammered by Coach Sarkisian’s lawsuit?

Q:        This week Steve Sarkisian, USC’s former head football coach, filed a lawsuit claiming that he was wrongfully terminated.  As you may recall, Sarkisian  was fired shortly after USC’s Athletic Director, Pat Haden, indicated that Sarkisian was placed on indefinite leave and was “not well.”   It has been widely reported that Sarkisian has a substance abuse problem, and specifically, a problem with alcohol.  This was seemingly confirmed by Sarkisian going to rehab, and now, by this lawsuit.  This begs an interesting question – is it possible that USC violated the Americans with Disabilities Act (“ADA”) or other laws that protect those with disabilities by terminating Sarkisian?

A:        Well … it is complicated, but there is certainly a possibility.   As you may recall, a similar situation was covered in one of our previous blogs about “Johnny Football,” who coincidentally is getting a start this Sunday.  (See http://wp.me/p67Lhq-3g )

As a threshold matter, a person that uses illegal drugs, or abuses legal drugs, is not considered “disabled” pursuant to the ADA.  However, alcoholism is a covered disability under the ADA so long as the alcoholic is qualified to perform the essential functions of the job.  Like any disability, pursuant to the ADA (or the Fair Employment and Housing Act), an employer is required to reasonably accommodate an employee who suffers from alcoholism.  Leave can be a form of accommodation.

But, here is where it gets a little confusing.  On one hand, an employer can take an adverse employment action, including termination, against an employee whose use of alcohol adversely affects job performance or conduct.  Additionally, an employer may also take an adverse employment action if a person is under the influence at work.  On the other hand, Title 2 CCR section 7294.0 states that an employer has an obligation to engage in a “timely, good faith interactive process” when the employer “becomes aware of the need for an accommodation through a third party or by observation.”  So, even if the employee doesn’t say anything, if the employer is aware from some other source that the employee has an impairment that is interfering with his or her ability to perform his job, the employer is required to initiate the process.

Ultimately, whether USC violated federal or state law is an issue of timing and a variety of other facts.  While early reports that Sarkisian was intoxicated at games and/or practices seemingly support the termination, this doesn’t negate USC’s obligation to engage in the interactive process if the disability was obvious.  As a result, it could be possible that USC is not liable for wrongful termination, but is liable for its failure to engage in the interactive process and provide an accommodation, such as a leave, to Sarkisian.

Another wrinkle is that Haden allegedly placed Sarkisian under some type of “last chance agreement.”  In other words, Sarkisian signed an agreement prohibiting him from using alcohol and subjecting him to immediate termination if found intoxicated. There is not a lot of authority regarding these types of “last chance agreements” and the cases seem to be somewhat contradictory.  This makes sense, because in California, terminating an employee for refusing to participate in an employer-mandated alcohol treatment program has been found to violate an employee’s constitutional right of privacy.  Meanwhile in federal courts, last chance agreements have generally been upheld.  (See i.e., Pettus v. Cole (1996) 49 Cal.App.4th 402; Longen v. Waterous Co (8th Cir. 2003) 347 F.3d 685.)

In the end, these are shakey, not stirred, situations.  An employer considering terminating an employee for alcohol abuse must look to both federal and state law for guidance and proceed carefully to avoid getting smashed with a lawsuit.

We made our list. You should check it twice. Here is our BMJ holiday employment checklist.

Q:     The Holidays can be a gift to Plaintiffs’ attorneys and disgruntled employees.  Are there any strategies that an employer should utilize so that this holiday season employers can enjoy the man with a red suit and not a New Year’s lawsuit?

A.     Yes. Here is our BMJ Holiday Employment checklist.  Check it twice.

○The Holiday Party

Just because the employees are offsite (or onsite after hours) does not mean they are not subject to sexual harassment rules and laws.  Parties can cause employees to be merry, but they should not be too merry…or …well…just plain naughty.  To that end, employers should remind employees to keep dress appropriate and their behavior nice.FullSizeRender

Also, employers should think carefully before serving alcohol at their holiday parties.  Not only may it facilitate inappropriate comments (and lawsuits in the new year), it may also lead to other more dangerous situations, like drinking and driving.  To limit exposure, employers who still want to serve alcohol may want to limit employee alcohol intake by issuing drink tickets, employing private bar tenders (who check IDs and refuse to serve people who have had too much), and closing the bar early.  Also, employers should offer rides or reimbursement for Uber or taxis.

Finally, employers should not require (or strongly suggest) that employees attend the party if it is outside working hours.  If it is considered a requirement, then it is compensable time, and an employer will need to pay their employees for attending.

○Holiday Pay

California does not require paid time off for holidays or additional wages for employees who work on holidays.  If an employer does pay a holiday premium and employees work overtime, the premium does not need to be calculated in their overtime rate.  In other words, premium holiday pay is not considered part of the “regular rate” of pay.  Indeed, an employer is allowed to credit the time and one-half premium pay on holidays against the overtime otherwise owed to the employee.  Additionally, small holiday gifts or discretionary holiday bonuses are not  included in the “regular rate.”

Also, please note that if an employer does provide a paid holiday off (e.g., it provides 8 hours of pay and the employees are not required to come to work), this paid holiday off does not count as time worked to determine whether an employee worked more than 40 hours for the purposes of overtime.

○Gift Cards

Some employers like to give gift cards to their employees during the holidays.  These may be deemed taxable income if the gift card can be considered a cash equivalent under Treasury Regulations section 1.132-6(c). The IRS considers a gift card to be a cash equivalent if it provides for the purchase of general merchandise, as opposed to being used to redeem a specified item.

○Volunteering

While this is the time of year we all want to give back, remember that “volunteer work” is only allowed without contemplation of pay for individuals who volunteer for a nonprofit or like organization.  In other words, an employer must be careful if their company is partnering with a charitable organization and their employees seek to donate their time.  If an employer is directly involved in giving, the employer should take care to also give its employees their pay if the employees are providing their time to the charitable cause.  Also, if the employees’ children want to help out (once school is out) you may run into child labor law issues.

○ Religion in the Workplace

The California Fair Employment and Housing Act prohibits religious discrimination of any kind.  But, this is tricky because the law does not permit prohibiting all forms of an employee’s religious expression.  As such, employers need to walk a delicate line.  That said, employers should be wary of religious-themed décor and other forms of displays and expressions that discuss religion.

○ Payday falls on a holiday

An Employer’s established payday sometimes falls on a holiday.  The Civil Code defines “holidays” (which includes every Sunday).  If payday falls on a defined holiday, pay may be provided on the next business day following the holiday.

From everybody at the BMJ Employment Law Team – Happy Holidays and a lawsuit free New Year!

 

Are elected officials, board members and appointed officials required to take mandatory sexual harassment prevention training?

Q:     Are elected officials, board members and appointed officials required to take mandatory sexual harassment prevention training?

A:     Maybe.   This is an open question.  Mandatory sexual harassment training is required for all supervisors that are employed either with a private company that has over 50 employees or for public agencies.  This training is often referred to as AB 1825 training.  Specifically, the statute states:

. . .  an employer having 50 or more employees shall provide at least two hours of classroom or other effective interactive training and education regarding sexual harassment to all supervisory employees who are employed as of July 1, 2005, and to all new supervisory employees within six months of their assumption of a supervisory position.

Based on the plain reading of the statute, elected officials, board members and appointed officials are at least arguably supervisors and can direct other employment decisions.  This would seem to indicate that they are required to take the training.  That said, often times, these individuals, particularly board members, are not considered employees.  AB 1825 applies to supervisory employees.  This would seem to suggest that at least some of these individuals are not required to take the training.

The Department of Fair Employment and Housing (DFEH) has weighed in on this issue.  As you may recall, Bob Filner (former mayor of San Diego) got into trouble for sexual harassment.  In the wake of that scandal the DFEH required all elected officials to attend AB 1825 training.  This prompted the DFEH director to state, “[t]his agreement serves as a model for other local government agencies to fully comply with the sexual harassment training required of all supervisors, including elected and appointed official under the Fair Employment and Housing Act.”

Based on the director’s comment, the DFEH has taken the position that elected officials, board members and appointed officials are required to attend AB 1825 training.  Unfortunately, the law itself is less clear.  Ultimately, there is no harm in requiring the training (except for the potential gripes about a 2 hour training requirement.)

Notwithstanding the above, the real reason an organization should require training (besides hopefully preventing sexual harassment in the first instance) is to provide the argument that the organization took all reasonable steps to prevent harassment in the defense of a harassment suit.  This argument is helpful even if an organization wasn’t technically required to comply with AB 1825.

For those elected officials, board members and appointed officials that have other employment, in addition to their public service, there may be a way to avoid taking the training in both capacities.  The applicable regulations provide the following to prevent duplication:

A supervisor who has received training in compliance with this section within the prior two years either from a current, a prior, an alternate or a joint employer need only be given, be required to read and to acknowledge receipt of, the employer’s anti-harassment policy within six months of assuming the supervisor’s new supervisory position or within six months of the employer’s eligibility. That supervisor shall otherwise be put on a two year tracking schedule based on the supervisor’s last training. The burden of establishing that the prior training was legally compliant with this section shall be on the current employer.

In general, it is always better to be safe than sorry, and training is fairly easy to complete.  There are a number of attorneys (including Baker Manock & Jensen), human resource companies and on-line services that provide the training.

FACT CHECK: Is it true that “Valley employers no longer have to worry about defending themselves against lawsuits related to errors on wage statements”?

Q.     I saw the headline stating, “Governor signs bill to protect employers from ‘frivolous’ lawsuits.” Is it true that “Valley employers no longer have to worry about defending themselves against lawsuits related to errors on wage statements”?[1]

A.     Not really.  AB 1506 simply amends Labor Code section 2699, otherwise known as the Private Attorney General’s Act or “PAGA”, but does not prevent a plaintiff from suing for the same “frivolous” violations. PAGA allows an employee to stand in the shoes of the Labor and Workforce Development Agency (“LWDA”) to bring an enforcement action on behalf of him or herself and other similarly situated employees based on violations of the California Labor Code.  The PAGA recovery is limited to the penalties that could be recovered by the LWDA and does not include other damages that would otherwise be provided directly to an aggrieved employee.  The employees are able to retain 25%  of the recovered PAGA penalty while the remaining 75% of the PAGA penalty must be remitted to the Labor and Workforce Development Board.  PAGA provides a cure provision for some, but not all, Labor Code violations. In those instances, if an employer can cure the violation within 33 days, the plaintiff is precluded from filing a PAGA lawsuit.  The new law (i.e., AB 1506) simply adds a provision to PAGA that states that certain wage statement violations can be cured.

While this is a positive development, it is not much of win for employers because it only amends PAGA and not the underlying Labor Code statute regarding wage statements. In other words, while a plaintiff may be limited in its use of a PAGA cause of action for errors related to wage statements, there is nothing prohibiting a plaintiff from simply alleging a violation of the statute that creates the wage statement requirements in the first place (i.e., Labor Code section 226).  Indeed, PAGA causes of action are rarely alleged by themselves because they are limited to penalties and even those limited penalties must be shared with the LWDA.

Based on the above, it is clear that a plaintiff does not need PAGA to bring a claim. The underlying statute (i.e., Labor Code 226) still provides an avenue for the same frivolous lawsuits.  Specifically, Labor Code section 226(e) provides:

An employee suffering injury as a result of a knowing and intentional failure by an employer to comply [with wage statement requirements] is entitled to recover the greater of all actual damages or fifty dollars ($50) for the initial pay period in which a violation occurs and one hundred dollars ($100) per employee for each violation in a subsequent pay period, not to exceed an aggregate penalty of four thousand dollars ($4,000), and is entitled to an award of costs and reasonable attorney’s fees.

….

(B) An employee is deemed to suffer injury for purposes of this subdivision if the employer fails to provide accurate and complete information as required by any one or more of items (1) to (9), inclusive, of subdivision (a) and the employee cannot promptly and easily determine from the wage statement alone one or more of the following:

(i) The amount of the gross wages or net wages paid to the employee during the pay period or any of the other information required to be provided on the itemized wage statement pursuant to items (2) to (4), inclusive, (6), and (9) of subdivision (a).

(ii) Which deductions the employer made from gross wages to determine the net wages paid to the employee during the pay period. Nothing in this subdivision alters the ability of the employer to aggregate deductions consistent with the requirements of item (4) of subdivision (a).

(iii) The name and address of the employer and, if the employer is a farm labor contractor, as defined in subdivision (b) of Section 1682, the name and address of the legal entity that secured the services of the employer during the pay period.

(iv) The name of the employee and only the last four digits of his or her social security number or an employee identification number other than a social security number.

In sum, a plaintiff does not need PAGA to bring the same frivolous wage statement lawsuits as before the new law. Labor Code section 226 can be brought without asserting a PAGA claim.  Moreover, Labor Code section 226 claims can be brought as a class action or in an individual capacity.  These claims also provide for attorneys’ fees to a prevailing plaintiff. While, there is no doubt that PAGA is a real issue for employers and any limitation in its use is a positive development, employers need to realize that the new law does not protect them from frivolous lawsuits.  This new law merely removes one small arrow in the plaintiff’s counsel’s quiver of many.

[1] http://www.thebusinessjournal.com/news/legal/20098-governor-signs-bill-to-protect-employer-from-frivolous-lawsuits

Lawyer-up! What is an employer’s obligation to provide an attorney to an employee??

Q.     Fresno Unified School District denied legal counsel to a high level administrator who is being investigated by the FBI. [1]  What is an employer’s obligation to provide an attorney to an employee in a situation like this?

A.     Whether an employer must provide a legal defense to an employee facing criminal charges is still an open question.  And, there is one rule for public employees and another for private employees.

California Labor Code section 2802, which applies to private employers, provides that an employer must indemnify its employees “for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties . . . .”  As such, an employer may be required to reimburse an employee for the cost of the defense of a legal matter, so long as the alleged action occurred in the scope and course of the employee’s employment.  (See Grissom v. Vons Cos., Inc. (1991) 1 Cal.App.4th 52, 55.)  The “scope and course of employment” is interpreted broadly and the duty of an employer to indemnify extends even if the employee’s conduct “does not benefit the employer, even though the act is willful or malicious, and even though the act may violate the employer’s direct orders or policies.”  (Jacobus v. Krambo Corp. (2000) 78 Cal.App.4th 1096, 1102.)  Moreover, the employer must indemnify regardless of whether or not the employee is exonerated.  (Id. at 1101.)  In other words, the key question is whether the employee’s wrongful conduct was committed during the performance of her employment – not whether a wrongful act was committed.

The above question is complicated, however, because courts disagree on two critical components that would make it clear whether or not an employer must provide an attorney to an employee in a criminal proceeding.  First, it is unclear whether an employer must provide an attorney (on the front end) or simply reimbursement for the cost of an attorney (on the back end).  In Jacobus, the court found that “[Section 2802] requires the employer not only to pay any judgment entered against the employee for conduct arising out his [or her] employment but also to defend an employee who is sued for such conduct.” (Jacobus v. Krambo Corp., supra, 78 Cal.App.4th at 1100.)  On the other hand, in Grissom, the court notes that “[s]ection 2802 does not say that an employer must ‘defend’ an employee . . . .[but only that] if that expenditure is necessarily in direct consequence of the discharge of the employee’s duties, then the employer must ‘indemnify’ (i.e. reimburse) the employee.” (Grissom v. Vons Cos, Inc., supra, 1 Cal.App.4th at 57-58.)

The second  question is whether or not Section 2802 even applies to criminal proceedings at all or whether it is applicable to only civil actions.  In this regard, a California Court of Appeal, has flatly stated that “[t]here have been no California cases reaching the issue, and it appears to be an open one.” (Los Angeles Police Protective League v. City of Los Angeles (1994) 27 Cal.App.4th 168, 177.)

If it is ultimately determined that an employee’s actions, even if found to be wrong, were done in the course and scope of employment (and not in the employee’s personal capacity) an employer will likely be required to at least indemnify the employee for the cost of an attorney, if not be required to provide counsel.  But, where there is a criminal investigation and it is not a civil matter, it is unclear as to whether an employer is even required to indemnify or defend at all.  What is clear, however, is in the end, if the employee files a claim against an employer  for indemnification and wins, that employee will not only be entitled to be reimbursed for attorneys’ fees in the underlying criminal action, but also in the indemnification lawsuit against the employer.  This makes sense because Section 2802 includes reimbursement for “all reasonable costs, including, but not limited to, attorney’s fees incurred by the employee enforcing the rights granted by this section.” (Lab. Code § 2802(c).)

And, while there is one rule for private employers, there is yet another rule for public employers.  Some courts have assumed that section 2802 applies to public employees.  However, California courts have found that reimbursement of defense costs for public employees is governed exclusively by the Government Claims Act.  The Government Claims Act also provides that the employer has to indemnify similar to the requirement of section 2802, but provides a notable exception where the employee acted with fraud, malice or corruption.  Another exception to an public entity’s requirement to indemnify exists where the public entity is bringing an action against its own employee.  Also, Government Code 995.8 specifically discusses providing a defense in a criminal action.  That Code provision notes that the public entity may provide a defense in a criminal action “if:  a) The criminal action or proceeding is brought on account of an act or omission in the scope of his employment as an employee of the public entity; and b) The public entity determines that such defense would be in the best interests of the public entity and that the employee or former employee acted, or failed to act, in good faith, without actual malice and in the apparent interests of the public entity.”

[1] http://www.fresnobee.com/news/local/education/article42958392.html

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.

Politics, religion and football . . . Are there ANY safe water cooler topics?

Q.     This week, the Pope arrived in the United States[1], presidential candidate Ben Carson made a statement regarding a Muslim president[2], Green Bay’s quarterback, Aaron Rodgers, made a dig at Seattle’s quarterback, Russell Wilson, by commenting that “God is a Packer’s fan”[3], and there is more news with the ACLU regarding the Kentucky clerk[4]. My business’ water cooler has become the middle[5] of religious debate and conflict. I would like all my employees to leave their religion at their church, temple, mosque, etc. Can I forbid my employees from discussing religion at the workplace?

A.     This is a difficult employment situation because both sides have rights – (1) those who wish to share their religious beliefs, and (2) those who are offended by those religious beliefs. In their Compliance Manual (Section 12: Religious Discrimination), the Equal Employment Opportunity Commission (“EEOC”) provides the following guidance for employers faced with religious expression in the workplace.

Permitting Prayer, Proselytizing, and Other Forms of Religious Expression

Some employees may seek to display religious icons or messages at their work stations.  Others may seek to proselytize by engaging in one-on-one discussions regarding religious beliefs, distributing literature, or using a particular religious phrase when greeting others.  Still others may seek to engage in prayer at their work stations or to use other areas of the workplace for either individual or group prayer or study.  In some of these situations, an employee might request accommodation in advance to permit such religious expression.  In other situations, the employer will not learn of the situation or be called upon to consider any action unless it receives complaints about the religious expression from either other employees or customers.  As noted in §§ II-A-3 and III-C of this document, prayer, proselytizing, and other forms of religious expression do not solely raise the issue of religious accommodation, but may also raise disparate treatment or harassment issues.

To determine whether allowing or continuing to permit an employee to pray, proselytize, or engage in other forms of religiously oriented expression in the workplace would pose an undue hardship, employers should consider the potential disruption, if any, that will be posed by permitting this expression of religious belief. As explained [in the manual], relevant considerations may include the effect such expression has had, or can reasonably be expected to have, if permitted to continue, on co-workers, customers, or business operations.

http://www.eeoc.gov/policy/docs/religion.html

While the EEOC’s Compliance Manual is not binding law, the EEOC is the agency charged with enforcing federal laws that pertain to religious discrimination. As such, their guidance and interpretation of legal authority should be heeded. That said, heeding this advice is difficult because it is rather subjective. And, preventing an employee from sharing his or her religious beliefs can result in a claim by the sharing employee. Meanwhile, permitting the employee to share can lead to a claim by an employee offended by the religious comments. As a result, the employer is potentially “damned if they do and damned if they don’t.”[6]

Employers faced with these types of religious accommodation questions should consider reviewing the EEOC link provided above. Then, they should call their employment lawyer, call their legislator and maybe, say a few prayers.

[1] http://www.foxnews.com/politics/2015/09/24/pope-francis-delivers-historic-address-to-congress/?intcmp=hpbt3

[2] http://www.nytimes.com/politics/first-draft/2015/09/22/ben-carson-cant-change-subject-after-contentious-muslim-remark/?_r=0

[3] http://bleacherreport.com/articles/2570096-aaron-rodgers-credits-god-after-packers-defeat-russell-wilson-seahawks

[4] http://www.washingtonpost.com/news/morning-mix/wp/2015/09/22/aclu-kentucky-clerk-kim-davis-is-meddling-with-countys-marriage-licenses/

[5] choose one: middle east, middle Kentucky, middle of the Meet the Press, middle of the Pope’s visit

[6] ironic