• Being “On-Call” Does Not Consitute “Work”

    The Second Appellate District published its decision in Augustus v. ABM Security Services, which overturned a trial court’s award of $90 million in statutory damages, interest, penalties, and attorney fees for a class of security guards who were allegedly denied rest breaks.  There has been much controversy over the extent to which employers must relieve employees of duty while on rest and meal breaks.  The court’s opinion does a fairly thorough analysis and is worth reading.  The following are some highlights from the case.

    The trial court certified a class and granted plaintiffs’ motion for summary adjudication, concluding an employer must relieve its employees of all duties during rest breaks, including the obligation to remain on call. The trial court awarded approximately $90 million in statutory damages, interest, penalties, and attorney fees on the premise that California law requires employers to relieve their workers of all duty during rest breaks. The appellate court concluded the premise was false, and therefore reversed the order.

    ABM employs thousands of security guards, some sites where only a single guard is stationed, while others dozens could be stationed.  ABM policies required security guards to remain on-call and to carry a radio or pager even when the employee was on his/her rest break.  Labor Code Section 226.7, and the applicable wage orders, require employers to “afford their nonexempt employees meal periods and rest periods during the workday.”  The plaintiffs alleged since they were required to remain on-call,they were not relieved of all duties and therefore they were not afforded required rest periods.

    The appellate court compared the wage order’s rest period requirement and the language in Labor Code section 226.7, and concluded that while an employer cannot require an employee to perform work while on a rest period, being on-call (at least in this situation) did not require the employees to perform work.

    [A]lthough ABM’s security guards were required to remain on call during their rest breaks, they were otherwise permitted to engage and did engage in various non- work activities, including smoking, reading, making personal telephone calls, attending to personal business, and surfing the Internet. The issue is whether simply being on-call constitutes performing “work.” We conclude it does not.

    The guards had a variety of duties they would perform throughout the day, including greeting visitors, allowing egress and ingress to the premises, making rounds of the buildings, responding to emergencies, etc.  Although a guard could be called back to work to perform such tasks, “remaining available to work is not the same as actually working.”

    The court also differentiated rest breaks from meal breaks under the wage order.  Subdivision 11(A), pertaining to meal periods requires that an employee be “relieved of all duty” during a meal period. Subdivision 12(A), regarding rest breaks, contains no similar requirement. The court found that if the IWC had wanted to relieve an employee of all duty during a rest period, including the duty to remain on call, it knew how to do so. Additionally, since the IWC’s order allows a paid on-duty meal period in some circumstances, “it would make no sense to permit a 30- minute paid, on duty meal break but not a 10-minute paid rest break.”

    In an amended portion of the decision, the court looked at the meaning of the word, “work,” both as a noun and a verb:

    The word “work” is used as both a noun and verb in Wage Order No. 4, which defines “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.” (Cal. Code Regs., tit. 8, § 11040, subd. 2(K).) In this definition, “work” as a noun means “employment”—time during which an employee is subject to an employer’s control. “Work” as a verb means “exertion”—activities an employer may suffer or permit an employee to perform. (See Tennessee Coal, Iron & Railroad Co. v. Muscoda Local No. 123 (1944) 321 U.S. 590, 598 [work is “physical or mental exertion (whether burdensome or not) controlled or required by the employer and pursued necessarily and primarily for the benefit of the employer and his business”].) Section 226.7, which as noted provides that “[a]n employer shall not require an employee to work during a meal or rest or recovery period,” uses “work” as an infinitive verb contraposed with “rest.” It is evident, therefore, that “work” in that section means exertion on an employer’s behalf.

    I’m not a linguist, but I know we will see this language quoted in future cases.

    In the end, the court concluded that “on-call status is a state of being, not an action. But section 226.7 prohibits only the action, not the status. In other words, it prohibits only working during a rest break, not remaining available to work.”

    Augustus will be useful to occupations other than security guards since all of the wage orders contain identical language regarding rest breaks.  Any industry where the employee is required to remain on-call while on a rest break, and any employee that is required to remain on-call during rest breaks, should review Augustus.

    The Law Office of Phillip J. Griego
    95 South Market Street, Suite 520
    San Jose, CA 95113
    Tel. 408-293-6341
     
    Original article by Robert E. Nuddleman, former associate of The Law Office of Phillip J. Griego.
     
    Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.
     
    Your use of this blog does not create an attorney-client relationship between you and the Law Office of Phillip J. Griego. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and the Law Office of Phillip J. Griego cannot guarantee the confidentiality of anything posted to this blog.Phillip J. Griego represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

  • California Supreme Court Refuses Sleep Time Exemption

    The California Supreme Court issued its decision in Mendiola v. CPS Security Solutions, where the court examined California’s sleep time rules for employees working 24-hour shifts.  I previously wrote about this case in 2013, and then updated the article when the Supreme Court granted review of the case.  I attended the oral arguments and I can’t say I am surprised by the court’s ruling. In essence, the court held that California does not allow an employer to deduct sleep time from the employee’s hours worked.

    The court did not overturn a previous case under wage order 9 dealing with ambulance drivers/attendants, but limited that case to the specific facts of that case.  The court did disapprove of another case that expanded the sleep time deduction to non-ambulance drivers/attendants.

    California requires employers to pay employees for all “hours worked.”  Most wage orders define hours worked as any time the employee is subject to the employers control, and includes any time the employee is suffered or permitted to work.  This means that if the employer requires the employee to be in a specific place, the employee is under the employee’s control and must be compensated for that time.  There are some exceptions, such as wage order 5 which has a special definition of “hours worked” for employees that are required to live on the premises.

    This case is going to have significant impact in the caregiver industry.  Even at minimum wage (currently $9.00 per hour in California), caregivers working 24-hour shifts will earn at least $283.50 per day–more if the employee does not qualify as a personal attendant under the Domestic Workers Bill of Rights.  With weekly overtime, if the employee works 7 days per week, the employer will have to pay no less than $2,088.00 per week.  That’s almost $109,000.00 per year for 24-hour live-in care.

    Most families will not be able to afford the cost of live-in care unless they employe 2 or 3 different caregivers each day.  This may be good news for residential care facilities and other homes for the aged, but it’s bad news for anyone who wants to spend their last years in the home.

    There may be other alternatives to 24-hour care that families and care agencies should explore, and some employees may still qualify under a different definition of “hours worked.”  For example, if the employer does not require the employee to remain on the premises, then the employee is not necessarily working just because the employee chooses to remain on the premises after his/her shift ends.

    If you work a 24-hour shift, or if you have employees working a 24-hour shift, you should consult with an attorney familiar with California’s wage and hour laws to make sure you are handling things correctly.

    The Law Office of Phillip J. Griego
    95 South Market Street, Suite 520
    San Jose, CA 95113
    Tel. 408-293-6341
     
    Original article by Robert E. Nuddleman, former associate of The Law Office of Phillip J. Griego.
     
    Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.
     
    Your use of this blog does not create an attorney-client relationship between you and the Law Office of Phillip J. Griego. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and the Law Office of Phillip J. Griego cannot guarantee the confidentiality of anything posted to this blog.Phillip J. Griego represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

  • NEW LAWS FOR 2015

    The following is a quick summary of the most significant changes in the law impacting California businesses.

    Paid Sick Leave for All California Employees – Effective July 15, 2015, employers doing business in California must provide paid sick days to almost all employees. Full-time and part-time employees will accrue 1 hours of paid sick leave for every 30 hours worked. California’s paid sick leave begins accruing as soon as the employee starts to work , although an employer can prohibit an employee from using accrued paid sick leave in the first 90 days of employment. Employers may “limit an employee’s use of paid sick days to 24 hours or three days in each year of employment.” Unused paid sick days carry over to the following year, but employers can place a 6-day(48-hour) cap on the paid sick day accrual. Some cities have ordinances that allow a higher cap, and employers have to comply with whichever laws are most favorable to employees. Employers must also provide written notice of the accrued and used sick leave, either on the pay stub or in a separate document, with every paycheck.

    City Paid Sick Leave Ordinances –San Francisco, Oakland and San Diego passed city-wide ordinances requiring paid sick leave for certain employees. The city ordinances are similar to California’s new paid sick leave law, but typically provide additional benefits for employees working within city limits.

    Federal Regulations Regarding Companions Goes Into Effect – Although the Department of Labor has said it will not enforce the new regulations until mid-year, effective January 1, 2015, companions will be entitled to overtime when they work more than 40 hours in a week, unless otherwise exempt from the Fair Labor Standards Act. While some personal attendants may still be exempt if the household owner employs the companion directly and the duties are limited to providing companionship and protection, caregivers employed by third-party employers and caregivers that provide care in addition to companionship and protection are now covered by the FLSA. Although personal attendants in California have been entitled to overtime after 9 hours in a day or 45 hours in a week, Californians using caregivers may need to pay weekly overtime after 40 hours in a week.

    Additional Protections Under the Fair Employment and Housing Act –

    Unpaid Interns Are Protected from Unlawful Harassment – Effective January 1, 2015, the Fair Employment and Housing Act extends protection to unpaid interns. Keep in mind that the Labor Commissioner and the Department of Labor only allow unpaid interns in a few limited situations, typically when the intern is receiving school credit and the employer receives very little benefit from the work. If you use interns, now is a good time to examine whether the interns are actually entitled to wages.

    Anti-Bullying Module for Sexual Harassment Prevention Training – All employers with 50 or more employees are required to provide 2 hours of sexual harassment prevention training to all supervisory employees every 2 years. Although “bullying” is not strictly prohibited by law, AB 2053 now requires the sexual harassment prevention training include a module on anti-bullying.

    No Discrimination Against Workers with Special Drivers Licenses – The DMV must issue an original driver’s license to California residents even if the person cannot lawful residence in the United States.  AB 1660 prohibits discrimination against an individual because he or she holds or presents a driver’s license issued under these provisions, or to require a person to present a driver’s license, except in specific situations. Additionally, FEHA’s definition of “national origin” now includes discrimination on the basis of possessing a driver’s license granted under Section 12801.9 of the Vehicle Code.  The new laws do not alter an employer’s rights or obligations regarding obtaining proof of lawful residency prior to employment. Any action taken by an employer that is required by the federal Immigration and Nationality Act (8 U.S.C. Sec. 1324a) is not a violation of law. Driver’s license information obtained by an employer must be treated as private and confidential, is exempt from disclosure under the California Public Records Act, and can not be disclosed to any unauthorized person or used for any purpose other than to establish identity and authorization to drive.

    Employers Using Third-Party Employers Are Liable for Wages and Workers’ Compensation Insurance – Labor Code section 2810.3 requires a “client employer” to share with a “labor contractor” all civil legal responsibility and civil liability for all workers supplied by that labor contractor for the payment of wages and the failure to obtain valid workers’ compensation coverage.  In other words, if your company receives workers through a contracting agency, and that agency fails to pay the worker or fails to maintain valid workers’ compensation coverage, your company could be responsible for any unpaid wages or workers’ compensation claims. Employers can still include indemnification language in their contracts, but they cannot avoid liability by hiring the worker through a third-party employer.

    Longer Statute of Limitations for Liquidated Damages and Failure to Timely Pay Final Wages – Existing law provides for criminal and civil penalties for certain wage violations and authorizes the Labor Commissioner to recover liquidated damages for minimum wage violations. AB 1723 expands Labor Code section 1197.1 to allow the Labor Commissioner to issue citations and seek penalties for the willful failure to timely pay wages of a resigned or discharged employee (e.g., waiting time penalties).

    Several Cases Cause Employers to Reconsider Mandatory Arbitration Provisions – For years employers had difficulty requiring employees to agree to resolve all dispute through arbitration. Recent U.S. Supreme Court and California court decisions make it easier for employers to require binding arbitration for some employment law claims. Employers should evaluate whether binding arbitration is the right decision for their business. There are many pros and cons to resolving cases through binding arbitration, and employers must still be careful when drafting arbitration agreements. Just because you find an arbitration agreement on line does not mean it will be enforceable.

    Minimum Wage Increase By Various Cities – Several cities passed their own ordinances requiring a higher minimum wage for employees working within certain geographical limits:

    City Rate Effective
    Berkeley $10.00$11.00 1/1/1510/1/15
    Menlo Park $10.30 7/1/15
    Oakland $12.25 3/2/15
    Richmond $9.60 1/1/15
    San DiegoRepealed/delayed by voter action $9.75 1/1/15
    San Francisco $11.05$12.25 1/1/155/1/15
    San Jose $10.30 1/1/15
    Sunnyvale $10.30 1/1/15

    We expect to see more cities adopt similar legislation, and California legislators are trying to pass a higher California minimum wage by the end of the year (currently slated to increase to $10.00 per hour on January 1, 2016).

    Employers need to update their employment handbooks and their policies to comply with the new laws. There is no better time to review your policies and practices with a knowledgeable employment attorney. The New Year affords employers the opportunity to start the year in compliance, and avoid potentially costly mistakes.

    If you have any questions about the new laws, or any employment-related matter, contact our office and speak with one of our attorneys. Let us help you figure out how to employ your workers correctly, so you can focus on growing your business.

    The Law Office of Phillip J. Griego
    95 South Market Street, Suite 520
    San Jose, CA 95113
    Tel. 408-293-6341
     
    Original article by Robert E. Nuddleman, former associate of The Law Office of Phillip J. Griego.
     
    Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.
     
    Your use of this blog does not create an attorney-client relationship between you and the Law Office of Phillip J. Griego. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and the Law Office of Phillip J. Griego cannot guarantee the confidentiality of anything posted to this blog.Phillip J. Griego represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

  • Companies Will Be Responsible For Wages of Sub-Contractors

    Does your company use workers provided by other companies?  If so, your company may be liable for the other companies’ failure to pay wages or carry state-mandated workers’ compensation insurance.

    Governor Brown signed AB 1897, which adds Labor Code section 2810.3 effective January 1, 2015.  This new law requires a “client employer” to share with a “labor contractor” all civil legal responsibility and civil liability for all workers supplied by that labor contractor for the payment of wages and the failure to obtain valid workers’ compensation coverage.  In other words, if your company receives workers through a contracting agency, and that agency fails to pay the worker or fails to maintain valid workers’ compensation coverage, your company could be responsible for any unpaid wages or workers’ compensation claims.

    A “client employer” is a “business entity that obtains or is provided workers to perform labor within the usual course of business from a labor contractor.” A “client employer” does not include any of the following:

    (i) A business entity with a workforce of less than 25 workers, including those hired directly by the client employer and those obtained from, or provided by, any labor contractor.

    (ii) A business entity with five or fewer workers supplied by a labor contractor or labor contractors to the client employer at any given time.

    (iii) The state or any political subdivision of the state, including any city, county, city and county, or special district.

    A “labor contractor” is an “individual or entity that supplies workers, either with or without a contract, to a client employer to perform labor within the client employer’s usual course of business.”

    A “labor contractor” does not include specified nonprofit, labor, and motion picture payroll services organizations and certain 3rd parties engaged in an employee leasing arrangements.

    A “worker” does not include an employee who is exempt from the payment of an overtime rate of compensation for executive, administrative, and professional employees pursuant to wage orders by the Industrial Welfare Commission described in Section 515.

    The law does not prevent client employers and labor contractors from “mutually contracting for otherwise lawful remedies for violations of its provisions by the other party.”  In other words, the client employer can require the labor contractor to defend and indemnify the client employer in the event a worker sues the client employer, but the client employer can still be sued directly.  Labor contractors, client employers and workers may not waive any of the protections provided by Labor Code section 2810.3.

    There is no “opportunity to cure” provision, but a worker or his or her representative must notify the client employer of violations at least 30 days prior to filing a civil action against a client employer for violations covered by this section.  Neither the client employer nor the labor contractor may take any adverse action against any worker for providing notification of violations or filing a claim or civil action.

    The new law does not impose liability on a client employer for the use of an independent contractor other than a labor contractor or change the definition of independent contractor.

    The new law does not impose individual liability on a homeowner for labor or services received at the home or the owner of a home-based business for labor or services received at the home.

    If you use or supply sub-contractors, you will want to review and possibly revise your client and/or vendor agreements before the new year.

    The Law Office of Phillip J. Griego
    95 South Market Street, Suite 520
    San Jose, CA 95113
    Tel. 408-293-6341
     
    Original article by Robert E. Nuddleman, former associate of The Law Office of Phillip J. Griego.
     
    Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.
     
    Your use of this blog does not create an attorney-client relationship between you and the Law Office of Phillip J. Griego. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and the Law Office of Phillip J. Griego cannot guarantee the confidentiality of anything posted to this blog.Phillip J. Griego represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

  • California Expands National Origin Discrimination to Include Driver’s Licenses

    Existing law requires the Department of Motor Vehicles (DMV) to issue an original driver’s license to a person who is unable to submit satisfactory proof that the applicant’s presence in the United States is authorized under federal law if he or she meets all other qualifications for licensure and provides satisfactory proof to the department of his or her identity and California residency.  AB 1660, signed by Governor Brown, makes it a violation of the California Fair Housing and Employment Act (FEHA) for an employer or other covered entity to discriminate against an individual because he or she holds or presents a driver’s license issued under these provisions or to require a person to present a driver’s license, except in specific situations.

    Effective January 1, 2015, FEHA’s definition of “National origin” discrimination will include, but is not limited to, discrimination on the basis of possessing a driver’s license granted under Section 12801.9 of the Vehicle Code.  The new laws do not alter an employer’s rights or obligations under Section 1324a of Title 8 of the United States Code regarding obtaining documentation evidencing identity and authorization for employment. An action taken by an employer that is required by the federal Immigration and Nationality Act (8 U.S.C. Sec. 1324a) is not a violation of law.

    Driver’s license information obtained by an employer must be treated as private and confidential, is exempt from disclosure under the California Public Records Act, and can not be disclosed to any unauthorized person or used for any purpose other than to establish identity and authorization to drive.

    HR professionals and persons involved in the hiring process need to ensure they do not discriminate against individuals on the basis of possessing a driver’s license obtained under these provisions.

    The Law Office of Phillip J. Griego
    95 South Market Street, Suite 520
    San Jose, CA 95113
    Tel. 408-293-6341
     
    Original article by Robert E. Nuddleman, former associate of The Law Office of Phillip J. Griego.
     
    Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.
     
    Your use of this blog does not create an attorney-client relationship between you and the Law Office of Phillip J. Griego. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and the Law Office of Phillip J. Griego cannot guarantee the confidentiality of anything posted to this blog.Phillip J. Griego represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

  • New Laws Require Additional Training and Prohibit Harassment of Unpaid Interns

    Governor Brown signed AB 1443 and AB 2053 amending California’s Fair Employment and Housing Act.  AB 1443 expands FEHA’s anti-harassment protection to unpaid interns.  AB 2053 requires employers to add an anti-bullying module to their sexual harassment prevention training.  Employers and employees (and now volunteers) need to be mindful of the new protections and requirements.

    Protection for Unpaid Interns and Volunteers

    Existing law protects employees and applicants from unlawful discrimination and harassment in the workplace on account of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sexgender, gender identity, gender expression, age, sexual orientation, or military and veteran status.   AB 1443 expands FEHA’s protections to persons in unpaid internships or other volunteer positions.  The law does not make it lawful to employ unpaid interns, and the Labor Commissioner and the Department of Labor have taken strong positions that make it very difficult to use unpaid interns.  Regardless of whether the intern or volunteer is required to be paid as an employee, effective January 1, 2015, employers and employees may not discriminate or harass unpaid interns and volunteers in violation of FEHA.

    Employers should communicate to its employees that unpaid interns and volunteers are afforded the same rights to a harassment-free workplace as other employees.

    Anti-Bullying Training

    Employers with 50 or more employees are required to provide sexual harassment prevention training to supervisory employees every two years.  AB 2053 requires the training include a module regarding “prevention of abusive conduct.”  The law does not actually prohibit abusive conduct, unless such conduct otherwise violates FEHA, but it does require employers to train supervisory employees regarding conduct “that a reasonable person would find hostile, offensive, and unrelated to an employer’s legitimate business interests.”

    AB 2053 instructs, “Abusive conduct may include repeated infliction of verbal abuse, such as the use of derogatory remarks, insults, and epithets, verbal or physical conduct that a reasonable person would find threatening, intimidating, or humiliating, or the gratuitous sabotage or undermining of a person’s work performance. A single act shall not constitute abusive conduct, unless especially severe and egregious.”

    While abusive conduct unrelated to a protected category may not be illegal (yet), an employer could theoretically be cited for failing to train supervisors regarding such abusive conduct.  There is no indication that an employee could sue an employer for a failure to provide the requisite training, but the failure to provide the training, or a violation of a company’s anti-bullying policy, may certainly be evidence of a hostile work environment in the right case.

    Employers should ensure their next sexual harassment prevention training includes an anti-bullying module.  Employers may also want to consider updating their handbooks to ensure they have a policy prohibiting “abusive conduct.”

    The Law Office of Phillip J. Griego
    95 South Market Street, Suite 520
    San Jose, CA 95113
    Tel. 408-293-6341
     
    Original article by Robert E. Nuddleman, former associate of The Law Office of Phillip J. Griego.
     
    Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.
     
    Your use of this blog does not create an attorney-client relationship between you and the Law Office of Phillip J. Griego. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and the Law Office of Phillip J. Griego cannot guarantee the confidentiality of anything posted to this blog.Phillip J. Griego represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

  • New Laws Alter Overtime Requirements for Caregivers

    The Department of Labor recently announced that it is moving forward with its Final Rule eliminating, or at least restricting, the companion exemption to the Fair Labor Standards Act.  Separately, Governor Brown just signed AB 241 adding the Domestic Workers Bill of Rights to the California Labor Code.  Both laws will have a significant impact on home care providers and recipients.

    The following are a few brief highlights about the new regulations and Labor Code sections, and how they may impact the the elder care industry.

    Revised FLSA Regulations

    Since its inception, the FLSA exempted certain domestic workers (i.e., persons employed about the home).  In 1974, Congress amended the FLSA to include some, but not all, domestic workers.  Companions, sometimes referred to as “elder sitters,” or “personal attendants”, have never been covered by the FLSA.  When Congress expanded the FLSA to cover domestic workers but not companions, the FLSA adopted regulations defining the type of work that qualified for the companion exemption.  In the almost 40 years since the 1974 amendments Congress has not deemed it necessary to modify or otherwise alter the FLSA to increase or decrease its coverage with respect to companions.  The Department of Labor, however, has decided that it must now modify its regulations to comport with Congress’ original intent.

    The revised regulations eliminate the companion exemption for any worker employed by a third-party employer.  This means that if a family uses a third-party agency to provide companion care for a family member, the companion must be paid one and one-half times the employee’s regular rate of pay for any hours worked in excess of 40 hours per week.   Workers employed directly by the family are still exempt from the FLSA’s overtime requirements.

    The regulations also narrow the type of work that constitutes “companion” services.  Under the new regulations, the term “companionship services” means “the provision of fellowship and protection for an elderly person or person with an illness, injury, or disability who requires assistance in caring for himself or herself.” Companionship services also includes the provision of “care” if the care is provided “attendant to and in conjunction with the provision of fellowship and protection and if it does not exceed 20 percent of the total hours worked per person and per workweek.”

    The provision of ‘fellowship’ means to engage the person in social, physical, and mental activities, such as conversation, reading, games, crafts, accompanying the person on walks, on errands, to appointments, or to social events.

    The provision of “protection” means to be present with the person in their home, or to accompany the person when outside of the home, and to monitor the person’s safety and well-being.

    The employee can spend no more than 20% of his or her time providing “care,” which is defined as assisting the person with activities of daily living (such as dressing, grooming, feeding, bathing, toileting, and transferring) and assisting with instrumental activities of daily living (i.e., tasks that enable a person to live independently at home, such as meal preparation, driving, light housework, managing finances, assistance with the physical taking of medications, and arranging medical care).

    “Companionship services” excludes domestic services performed primarily for the benefit of other members of the household, such as cleaning, cooking or doing the laundry for other family members.

    The FLSA provides the minimum protection, and employers are still required to comply with state laws which either mirror the FLSA or provide greater protections for workers.  The new regulations do not come into effect until January 1, 2015, to give families time to adjust.

    Although the overtime obligations do not apply to employees employed directly by the families, families are required to maintain accurate records of the hours worked and wages paid.

    California’s Domestic Workers Bill of Rights

    The Domestic Workers Bill of Rights, which creates California Labor Code sections 1450 to 1454, eliminates the “personal attendant” exemption from Wage Order 15.  Wage Order 15 applies to workers employed by the household owner.  Since it’s adoption, Wage Order 15 has always exempted personal attendants from California’s overtime rules.  Employers have always been required to pay at least minimum wage for all hours worked, but until adoption of the Domestic Workers Bill of Rights, the employees were not entitled to overtime regardless of the number of hours worked.

    Unlike past legislative attempts to eliminate the personal attendant exemption, this bill is narrowly drafted with the sole purpose of eliminating the personal attendant exemption except in cases where the employee wages are paid by state or county programs (i.e., In-Home Supportive Services, Lanterman Developmental Disabilities Services Act, California Early Intervention Services Act, etc.).

    “Personal attendant” means any person employed by a private householder or by any third-party employer recognized in the health care industry to work in a private household, to supervise, feed, or dress a child, or a person who by reason of advanced age, physical disability, or mental deficiency needs supervision. The status of personal attendant shall apply when no significant amount of work other than the foregoing is required. For purposes of this subdivision, “no significant amount of work” means work other than the foregoing did not exceed 20 percent of the total weekly hours worked.

    Under the DWBR, personal attendants are entitled to overtime compensation at one and one-half times the employees’ regular rate of pay for all hours worked in excess of 9 hours per day or 45 hours per week.  The overtime obligation applies regardless of whether the worker is employed by the family or a third-party employment agency.  The only exception is if the wages are paid by through one of the listed state or county programs or if the person providing the services is the “parent, grandparent, spouse, sibling,child, or legally adopted child of the domestic work employer.”

    The DWBR, which become effective January 1, 2014, contains a sunset clause.  Unless new legislation is passed, the DWBR expires on January 1, 2017.  In the meantime, the governor is supposed to create a committee “composed of personal attendants or their representatives and the employers of personal attendants or their representatives” to “study and report to the Governor on the effects this part has on personal attendants and their employers.”

    Unintended Consequences?

    The intended purpose of the new DOL regulations and the DWBR is to increase the standard wages paid to people who take care of our family members who, by reason of age or disability, are not able to take care of themselves.  In the past, family members who could not care for themselves were either institutionalized, or a family member had to take care of them.  Since many, if not most, Americans have two-income households, it has become more cost-effective to hire a low-wage earner to care for mom and dad than for one or more family members to quit their job to perform the duty.

    I question whether these new laws will meet their intended purpose, and what unintended consequences may follow.  Take, for example, a caregiver who is providing 24-7 care for mom.  While I am not an advocate of anyone working 24-hours a day, 7 days a week, many families and workers choose to have someone overseeing mom all the time.  I’m going to put aside, for now, the benefits and drawbacks of having a single caregiver, and focus on the economic effects of the new laws in this commons situation.

    In California, most caregivers must receive at least $8.00 per hour for all hours worked (the minimum wage will increase to $9.00 per hour in 2014, and $10.00 per hour in 2016, and certain cities require a higher minimum wage).  The employer can lawfully deduct up to 8 hours from a 24-hour shift as “sleep time” provided the employee actually receives at least 5 hours of uninterrupted sleep (for more information about sleep time, see my post).  This means, the employee must receive no less than $896.00 per week ($8.00/hour x 16 hours/day x 7 days/week).  While an employer can deduct some of the costs of room and board in accordance with the Wage Order, in my experience most employers don’t have such an agreement in writing and therefore cannot lawfully deduct meals and lodging.

    Under California’s DWBR, the employee would be paid $1,164.00 ($8.00/hour x 45 regular hours + $12.00/hour x 67 overtime hours).  Under the revised DOL regulations, the employee must be paid $1,184.00 ($8.00/hour x 40 regular hours + $12.00/hour x 72 hours).  By my calculations, that about a 30% to 32% increase in wages for the employee, if the family can afford the increase.  If the family cannot afford the increase, the family will have a couple of options.

    Option number one will be to hire more workers to avoid paying overtime.  In California, because we have a daily and a weekly maximum on regular hours, there is no way to avoid some overtime liability because the employer can only deduct for sleep time if the employee works a 24-hour shift.  Under the DWBR, the minimum an employer could pay an employee for a 24-hour shift would be $156.00 per day ($8.00/hour x 9 regular hours + $12.00/hour x 7 overtime hours, with no compensation for 8 hours of sleep time).  The family would have to hire at least two workers to avoid the 45-hour weekly overtime cap.  The workers would also have to have a separate place to reside and pay for their own meals on their non-working days.

    That means instead of one worker earning $896.00 per week, and receiving room and board to boot, one employee will receive $780.00 per week and another employee will receive $312.00 per week.  The employer will pay $1,092.00 per week.  That’s about a 20% increase for the family, and a 15% decrease for the worker, excluding the loss of room and board.

    The only way to eliminate any overtime liability at all under the DWBR for 24-7 care would be to hire 6 different workers, each working no more than 9 hours a day or 45 hours a week.  Since an employer cannot deduct for sleep time for 9-hour shifts, the employer would have to pay one employee a day while he or she is sleeping, and the actual cost would be $1,344.00 per week ($192/day x 7 days/week).  Since paying no overtime would necessitate eliminating the sleep time exclusion, and because it would mean having six different workers through the week, most employers will not choose this option.

    Keep in mind, none of these calculations take into account the increased minimum wage in California that becomes effective July 1, 2014.

    Under the DOL regulations, there is a way to avoid any overtime by having 3 employees each work two 24-hour shifts and one 8-hour shift.  The employer would only pay $960.00 per week but that means each employee will only receive $320.00 per week, and this would not comply with California law.

    In summary, option number one requires the family to pay at least 20% more, but the individual employee will receive 15% less wages and now has to find a separate place to live.  The good news is that one additional person will be employed.  Keep in mind, none of these calculations consider the increased minimum wage that will take effect in 2014 and 2016.

    A second option is to place mom in a residential care or assisted living facility. The costs vary depending on the level of care required, and many allow family members to bring some of their own furniture so it can actually feel like home.  Many do not like this option because it moves mom out of the home, and it can be difficult to find a facility that provides the level of care the family desires. This option does nothing for the caregiver unless the caregiver has sufficient skills to work in a residential care or assisted living facility.

    A third option, at least in California, is to obtain government assistance.  Workers employed through IHSS or other specific state and county programs are still exempt from California’s overtime laws.  This allows every tax payer to bear the burden of increased care, but relieves some of the burden from the individual family – assuming the family qualifies for services.

    A final option is for a family-member to quit his or her job and stay home full time to take care of mom.  Before the necessity for a two-income household it was common for parents and grandparents to live with the family so the family could be responsible for taking care of themselves.  Each family will have to decide if that is a viable option for them.

    I am concerned that people will try to skirt the laws by hiring “independent contractors.”  While there are some instances where a caregiver can be an independent contractor, I cannot think of a situation where a 24/7 caregiver would be an independent caregiver.  Families should consult their attorney before hiring a caregiver directly and when choosing a third-party employment agency.

    What To Do

    The new regulations and the DWBR are already signed.  The only way to modify the DOL regulations is to convince the Secretary of Labor to repeal the changes, or to convince Congress to amend the FLSA.  In California, the purpose of the DWBR committee is to discovery what, if any, impact the new law has on families and caregivers.  I encourage everyone to get involved in the debate and share your experiences with your representatives.

    If you have questions about how these laws will impact your family or business, contact an employment attorney familiar with wage and hour laws in the home care industry.

    The Law Office of Phillip J. Griego
    95 South Market Street, Suite 520
    San Jose, CA 95113
    Tel. 408-293-6341
     
    Original article by Robert E. Nuddleman, former associate of The Law Office of Phillip J. Griego.
     
    Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.
     
    Your use of this blog does not create an attorney-client relationship between you and the Law Office of Phillip J. Griego. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and the Law Office of Phillip J. Griego cannot guarantee the confidentiality of anything posted to this blog.Phillip J. Griego represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

    an Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

  • Top Mistakes Employers Make Presentation on March 28, 2013

    I will present the Top Mistakes Employers Make presentation on March 28, 2013, for the Gavilan Employers Advisory Council.  The Gavilan EAC provides local employers with relevant Information on human resource issues and other topics of interest, opportunities to network professionally, and a greater understanding of the resources available through the Employment Development Department (EDD) and the California Employer Advisory Council (CEAC). Its membership represents a cross-section of the businesses and industries in the region, and strives to build a partnership between local employers and the EDD.

    The presentation will cover new laws for employers doing business in California as well as the biggest mistakes employers make that lead to costly litigation.

    If you are interested in attending, you can register for the event on the GEAC’s website.

    Top Mistakes Presentation Gavilan_3-28-13 Flyer.

    The Law Office of Phillip J. Griego
    95 South Market Street, Suite 520
    San Jose, CA 95113
    Tel. 408-293-6341
     
    Original article by Robert E. Nuddleman, former associate of The Law Office of Phillip J. Griego.
     
    Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.
     
    Your use of this blog does not create an attorney-client relationship between you and the Law Office of Phillip J. Griego. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and the Law Office of Phillip J. Griego cannot guarantee the confidentiality of anything posted to this blog.Phillip J. Griego represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

  • Are You Ready for the San Jose Minimum Wage Ordinance?

    The San Jose Minimum Wage Ordinance goes into effect on March 11, 2013.  Passed by voters during the last election, the new ordinance requires employers doing business in San Jose to pay a minimum of $10.00 per hour for any employee that works at 2 hours per week in San Jose.

    At first glance it might seem that the law only applies to businesses physically located in San Jose, but that is not accurate.  The ordinance defines an employer as:

    any person, including corporate officers or executives, as defined by Section 19 of the California Labor Code, who directly or indirectly through any other person, including through the services of a temporary employment agency, staffing agency or similar entity, employes or exercises control over the wages, hours or working conditions of any Employee and who is either subject to the Business License Tax Chapter 4.76 of the Municipal Code or maintains a facility in the City.”

    The City’s perspective is that anyone carrying on or conducting business in San Jose is subject to the Business License Tax.  Even if your business is located outside of San Jose, if you provide goods or services in San Jose you are an “employer” under the SJMWO.

    Not all employees working in San Jose are covered by the SJMWO.  Employees who are not otherwise entitled to payment of minimum wage under California minimum wage laws (e.g., outside salespersons, certain family members of the employer, etc.) are not “employees” under the SJMWO.  Additionally, the employee must work in San Jose at least 2 hours per week.

    In addition to paying the increased minimum wage, employers subject to the SJMWO must post the SJMWO poster in a conspicuous place.  You can download copies of the SJMWO poster here.

    The City has developed a list of FAQ’s that they hope to post on their website soon.  Unfortunately, there were a few errors in the FAQ’s that require revision, so we don’t know when the FAQ’s will be posted.

    The City has, or soon will, set up an enforcement mechanism for complaints regarding violations.  One of the benefits of the enforcement/complaint process is the ability to resolve the matter through early mediation or conciliation.  One of the drawbacks is that complaints do not need to be filed with the City agency and nothing prohibits an employee from pursuing a claim with the City and in court.

    As with many wage and hour statutes and regulations, an employee suing an employer for a violation of the SJMWO is entitled to recover his/her attorneys’ fees, but a successful employer is not able to recoup its attorneys’ fees even if the employer proves there was no violation.  The City hopes that its administrative process will allow the parties to resolve cases early without extensive litigation, and that the attorneys’ fees therefore will not be a significant issue in resolving a case.  I’ll hold my opinion until I see the results.

    One of the concerns is that an employer who has a posting violation, for example, may be subject to a $50.00 per day per employee penalty (plus attorneys’ fees), if the employer fails to have the required posting in a conspicuous place.  The penalty begins from the date of the violation and continues until the violation ceases.  For example, if you have 5 employees that each travel to San Jose at least 2 hours per week, and you fail to have the correct poster, you could face over $90,000.00 in penalties.

    Employers are also required to maintain payroll records, and to allow the City access to such records, for 4 years.

    Of course employers may not discriminate in any manner or take adverse action against any person in retaliation for exercising any of the rights under the SJMWO.

    Failing to understand and comply with the SJMWO may have devastating effects on your business.  Every employer and every employee should become familiar with the SJMWO so they can understand their rights, remedies and responsibilities.

    The Law Office of Phillip J. Griego
    95 South Market Street, Suite 520
    San Jose, CA 95113
    Tel. 408-293-6341
     
    Original article by Robert E. Nuddleman, former associate of The Law Office of Phillip J. Griego.
     
    Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.
     
    Your use of this blog does not create an attorney-client relationship between you and the Law Office of Phillip J. Griego. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and the Law Office of Phillip J. Griego cannot guarantee the confidentiality of anything posted to this blog.Phillip J. Griego represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

  • An Interesting Way to Resolve a Case: mediation/binding baseball arbitration

    I previously discussed some of my concerns regarding binding arbitration agreements.  Arbitration has its place, and it can be a very useful tool in resolving cases.  As much of my practice involves employment disputes, drafting an enforceable arbitration agreement can be difficult, and I believe arbitration oftentimes does not meet the objectives that it is intended to achieve (i.e., lower costs, quicker resolution, lower awards, etc.).  There are many variants to the typical arbitration or mediation options, and a recent case caught my eye because it presented one of the more unique variants.

    In Bowers v. Raymond J. Lucia Companies, Inc. (No. D059333), the parties were in the middle of binding arbitration, when they decided to dismiss the arbitration and the accompanying state court action, and participate in “mediation/binding baseball arbitration.”  According to the record, the plan was to:

    participate in a full day mediation. If, at the end of that mediation, the Parties have failed to reach an agreement, the Plaintiffs (Bowers, Seward, and LaBerge) shall provide to the mediator their last and final demand, which demand shall be some amount between $100,000 and $5,000,000, and the Defendants (Companies, Wealth Management, and Enterprises) shall provide to the mediator their last and final offer which offer shall be some amount between $100,000 and $5,000,000. The mediator shall then be empowered to set the amount of the judgment in favor of Plaintiffs against Raymond J. Lucia Companies, Inc. by choosing either Plaintiffs’ demand or Defendants’ offer, such binding mediator judgment to then be entered as a legally enforceable judgment

    At the end of the mediation, the mediator decided to award the plaintiffs the full $5,000,000.00.  That’s right, the “mediator” awarded the money.  This is unusual because typically mediators do not have the power or authority to “award” anything.  The mediator typically helps the parties reach a resolution, but if the parties are unable to reach an amicable (or unamicable?) resolution, the mediator’s job is done.  Because the parties in Bowers agreed the mediator could make a binding award if the mediation failed, the trial court and the appellate court upheld the award. Parties can agree to allow a third party to decide what the parties will pay, even if the evidence is not presented in a typical trial or arbitration setting.

    It’s easy to armchair quarterback this one and second-guess the thinking behind agreeing to such an unusual form of dispute resolution.  Going into the process the parties had to know that the plaintiff’s “last and final demand” was going to be $500,000.00, just like the defendant’s “last and final offer” was going to be $100,000.00.  The case does not provide a lot of facts regarding the underlying claims or liabilities (we only know that it was some kind of defamation claim), but I presume liability was not much of a question, and that the real issue was the amount of damages.  The big risk for each side is that, knowing the other side’s “last and final” number is likely going to be the highest or lowest allowed by the parties’ agreement, the resulting mediator’s “award” was essentially going to be an all or nothing deal.  I suppose there was the possibility that had the parties stuck with the original arbitration the arbitrators could have awarded significantly more than the $5,000,000.00 ceiling to which the parties agreed, but it seems like a pretty high risk given the fact that the mediator receives information differently than an arbitrator, a judge or a jury.

    I am a big proponent of mediation.  Given the costs and risks involved in litigation, mediation offers the parties the opportunity to have a say in the outcome of the resolution.  I’m not so sure I would be willing to hand that control over to the mediator.  The process of presenting my case in mediation differs significantly to how I present my case to the trier of fact.  I’m not sure how my presentation would have to change if I knew that at the end of the day the mediator was going to “decide” the case.

    If you want to read the case, you can find it here.

    The Law Office of Phillip J. Griego
    95 South Market Street, Suite 520
    San Jose, CA 95113
    Tel. 408-293-6341
     
    Original article by Robert E. Nuddleman, former associate of The Law Office of Phillip J. Griego.
     
    Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.
     
    Your use of this blog does not create an attorney-client relationship between you and the Law Office of Phillip J. Griego. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and the Law Office of Phillip J. Griego cannot guarantee the confidentiality of anything posted to this blog.Phillip J. Griego represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.