• 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.

  • Brown Vetoes Domestic Workers Bill of Rights (AB 889)

    On September 30, 2012, Governor Brown vetoed the Domestic Workers Bill of Rights (AB 889).  The governor’s veto message indicates, among other things, the bill raised too many unanswered questions about what “economic and human impact on the disabled or elderly person and their family of requiring overtime, rest and meal periods for attendants who provide 24 hours care.”  Governor Brown apparently felt that we should answer some of those questions before mandating a change in the law.  He seemed particularly troubled by the fact that the bill required the Department of Industrial Relations to find answers to the question and come up with regulations at the same time.

    I think the veto was a good move for now.  Let’s gather the facts and consider the impact of a law before we change it.

    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.

  • Domino’s Pizza Possibly Liable for Wrongful Termination by Franchisee

    Domino’s Pizza, like many companies, offers franchise opportunities for potential purchasers.  Domino’s allows the franchisee to use Domino’s name, trademarks, secret sauces, etc., in exchange for a royalty or license fee.  The Franchise Agreement grants the franchisee  the freedom to conduct its own independent business, and specifically states the franchisee “shall be solely responsible for recruiting, hiring, training, scheduling for work, supervising and paying the persons who work in the Store and those persons shall be your employees, and not [Domino’s] agents or employees.”

    When Taylor Patterson, a teenage restaurant employee, was allegedly sexually harassed and assaulted by the assistant manager at the local Domino’s owned by Sui Juris, LLC.  She also alleged that Domino’s Pizza, LLC, Domino’s Pizza, Inc., and Domino’s Pizza Franchising, LLC (the franchisor) were the assistant manager’s employers and therefore were vicariously liable for his actions under the doctrine of respondeat superior. The trial court disagreed and granted Domino’s motion for summary judgment.

    The appellate court overturned the trial court’s decision finding  reasonable inferences that there was a lack of local franchisee management independence. The court focused on several factors where the franchisor exercised control over the franchisees.  Sui Juris owner testified a Domino’s “area leader,”  told him to fire Taylor and one other employee. He said he had no choice; he had to follow the area leader’s instructions.

    Domino’s provided its franchisees with a “manager’s reference guide” describing the specific employment hiring requirements for all “personnel involved in product delivery.” It also described the documents that had to be included in employee personnel files, required all employees to submit “[t]ime cards and daily time report,” and specified explicit grooming standards for employees. The franchise agreement itself substantially limited franchisee independence in areas beyond food preparation standards. It limited the franchisee’s ability to relocate and dictated many of the internal programs and hours of operation and advertising requirements.

    Based on all these factors, the court concluded the assistant manager was not an independent contractor, or at least that there was sufficient evidence for a jury to conclude that the franchisor could be liable for the franchisee’s actions.

    I expect this case will be used by the plaintiff’s bar as a way to bring in franchisors in typical employment disputes.  This would not only increase the number of defendants and the breadth of discovery, it could also create conflict between the franchisee and the franchisor.  Companies or individuals considering a franchise agreement should seek the advice of competent legal counsel before signing the franchise agreement.

    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.

  • Recent Article Reveals Long Delays at State Labor Commissioner’s Office

    A recent article from the Los Angeles Daily Journal (Vol. 125 No. 057, March 23, 2012) reports “Wage claims get uneven treatment, records show.”  According to the article, data obtained through a Public Records Act request and interviews with lawyers representing business and workers reveals significant delays.

    State law requires the Labor Commissioner to conduct its hearings within 120 days after filing.  The Daily Journal’s analysis shows that 11 of the 16 regional offices did not meet that obligation in 2011.  Different offices report different average waiting periods, with Oakland showing the worst results: over 400 days to get to a hearing.  Santa Rosa, on the other hand, gets its cases to hearing within 85 days.  San Francisco heard its cases within 301 days on average.  San Jose averaged approximately 275 days to get to a hearing.

    The study did not discuss how long it takes for a decision to get mailed after the hearing.  By law, the decision is supposed to be written within 15 days after the hearing.  In my experience, however, it often takes several months to receive the actual decision.  This sometimes means a case can take between one to two years to resolve if filed with the Labor Commissioner.  Cases take even longer if they are then appealed to superior court for a trial de novo.

    Budget cutbacks and state-mandated furloughs as well as an increase in claims filed are main causes of the long delays.  In some cases, the state assigns hearing officers from other jurisdictions to help carry some of the load, and I’ve seen an improvement in the speed with which cases proceed in the last few months, but there are still significant delays.  In many instances, a case can move more quickly through court than through the Labor Commissioner.

    The Daily Journal article also discusses perceived inconsistent rulings reported by several practitioners.

    When deciding whether to proceed with a Labor Commissioner claim, claimants should consider the length of time it will take to receive a decision.  Employers should realize that they may need to maintain records for a longer period than required by law so they can ensure they have appropriate evidence and witnesses by the time a hearing comes around.

    If you are contemplating filing a claim with the Labor Commissioner, or if you’ve recently been notified that a claim has been filed, I highly recommend speaking with competent counsel familiar with the Labor Commissioner and wage and hour issues.

    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.

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

  • Revised New Hire Form

    Four months after providing the original template, the Labor Commissioner has posted a new template for employers to use when hiring new employees.  As you may recall, pursuant to the Wage Theft Protection Act, all new employees must receive and sign a “Notice to Employee” under Labor Code 2810.5.  The form includes information regarding the name and addresses of the employer, pay rates, and the employer’s workers’ compensation carrier.

    Employers were not required to provide the required notice to existing employees (unless one of the listed items changes), but all new hires must receive and execute the form.  The new form has slight changes affecting temporary staffing agencies.  Employers are not required to provide the new form to employees who already filled out the old form.

    The new form can be downloaded 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.

  • Obama Directs DOL to Expand FLSA to Cover In-Home Care Workers

    “President Obama announces a new rule that will ensure in-home care workers are included in the same minimum wage and overtime protections afforded to other workers under the Fair Labor Standards Act.”

    Last year the California legislature failed to pass legislation that would have added substantial burdens to families hiring home workers, including personal attendants or other in-home care providers.  President Obama is taking credit for newly proposed Department of Labor regulations modifying overtime and minimum wage requirements for in-home care workers.  The DOL previously attempted to make similar changes in 1993 and again in 2001, but those rules never became formalized.

    A copy of the currently proposed regulations can be downloaded here. To save you the time of having to read the 186-page document, I’ve summarized the proposed changes below.  The new regulations would not take affect until after the public is allowed the opportunity to comment on the proposed changes.

    Current regulations provide an exemption from the FLSA for in-home companions.  Like babysitters, the in-home companions care for the elderly or infirm and are typically employed by the household or family as opposed to a third-party employer.  There are a number of regulations defining what a “companion” can or cannot do and still remain exempt from the overtime and minimum wage obligations of the FLSA.  The new regulations make it clear that a companion is someone who provides fellowship and protection, but does not perform general household work.  The legislative history uses the example of a neighbor who comes over to help with grandma or grandpa.

    Under the new regulations, an exempt companion can:

    • Occasionally help the elderly person get dressed or undressed, but this cannot be a part of the regular duties.
    • Occasionally assist the elderly person with grooming including combing and brushing hair, assistance with brushing teeth, applying deodorant or washing face/hands following a meal.
    • Assist the elderly person with using the toilet or changing diapers.
    • Occasionally driver the elderly person to appointments, but this cannot be a part of the regular duties (the regulations suggest the companion should typically accompany the elderly person using a taxi or public transportation).
    • Cook meals so long as the meals are going to be eaten by the elderly person while the companion is there (e.g., no more preparing a week of meals at a time) and is not to be eaten by other members of the household.
    • Do some “light laundry” for the elderly person (but not for others), which can include putting clothes in the washer or dryer and assisting the elderly person with putting away or folding the clothes.
    • Occasionally assisting with bathing, but this cannot be a part of the regular duties.
    • Provide reminders of medical appointments or a predetermined medicinal schedule (e.g., provide pills out of a presorted pill box)

    Under the new regulations a companion cannot:

    • Do household chores for the benefit of other household members.
    • Vacuum, wash windows, dust or other similar “housekeeping” chores.
    • Provide medical care such as changing bandages, taking vital signs, evaluating health or other diagnostic or medically-related tasks (pulse, blood sugar, respiration, temperature) – The DOL is requesting comments on whether companions should be allowed to apply band-aids.
    • Determine whether prescription medications need to be taken.

    The new regulations make it clear that third-party employers (e.g., agencies) cannot take advantage of the exemption.  Even if the if agency is a joint employer with the family/household member, the employee must received federal minimum wage and overtime.  The definition of what constitutes family or household member for the purposes of determining the employer includes “an individual who is a child, niece, guardian or authorized representative, housemate, or person acting in loco parentis to the elderly or infirm individual needing companionship or live-in services.”

    The new regulations also change the record-keeping requires for live-in domestic workers.  Currently employers can avoid formal pay records for domestic live-in domestic workers if the parties have an agreement setting forth the agreed upon work hours with notifications for any deviations from the standard hours.  The DOL has determined that such lax record-keeping is no longer sufficient, and that even live-in domestic workers will be required to turn in accurate records of the actual hours worked, and employers are required to maintain those records as specified in the Act.  It is my understanding that companions employed by the family/household, regardless of whether they are live-in companions or not, will not have to keep records of hours worked, but that is not entirely clear.  Companions employed by third-parties will have to keep accurate records of hours worked.

    If you are interested in submitting your comments to the DOL regarding the proposed changes, you will eventually be able to log onto http://www.regulations.gov and search for RIN 12350AA05.  When I searched for it today, it was not available, likely because the regulations are not yet ready for public comment.

    If you or someone you know uses, employs or works with companions or other domestic workers, familiarize yourself with the proposed regulations and submit your comments.

    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.

  • Commission Agreements Must Be In Writing

    On October 7, 2011, Governor Brown signed AB 1396 which amends Labor Code Section 2751.  Section 2751 currently requires an employer who has no permanent and fixed place of business in the state and who enters into a contract of employment involving commissions as a method of payment with an employee for services to be rendered within the state to put the contract in writing and to set forth the method by which the commissions are required to be computed and paid. An employer who does not comply with those requirements is liable to the employee in a civil action for triple damages.  This statute has been held invalid (see Lett v. Paymentech, Inc. (N.D.Cal. 1999) 81 F.Supp.2d 992) because it applied only to out of state companies.  AB 1396 alters the statute and makes it applicable to all employers doing business in California.  AB 1396 also removes the triple damages clause.

    The new law requires:

    (a) By January 1, 2013, whenever an employer enters into a contract of employment with an employee for services to be rendered within this state and the contemplated method of payment of the employee involves commissions, the contract shall be in writing and shall set forth the method by which the commissions shall be computed and paid.
    (b) The employer shall give a signed copy of the contract to every employee who is a party thereto and shall obtain a signed receipt for the contract from each employee. In the case of a contract that expires and where the parties nevertheless continue to work under the terms of the expired contract, the contract terms are presumed to remain in full force and effect until the contract is superseded or employment is terminated by either party.

    Commission wages are compensation paid to any person for services rendered in the sale of such employer’s property or services and based proportionately upon the amount or value thereof.  Under the modified statute “Commissions” does not include short-term productivity bonuses such as are paid to retail clerks; and it does not include bonus and profit-sharing plans, unless there has been an offer by the employer to pay a fixed percentage of sales or profits as compensation for work to be performed.

    There are no penalties associated with a violation of the newly worded statute, but it could be a basis for suit under California’s Labor Code Private Attorney General Act (PAGA).

    If you pay your employees a commission, you must have the commission plan reduced to writing by January 1, 2013.  The contract must state the method of calculating the commission and how it is paid.  Employees must also receive a copy of the executed commission agreement.

    Commission plans can be simple or complicated, but many employers forget to include provisions in the commission agreement regarding when the commission is earned (versus when it is paid out), what conditions have to be met to earn the commission, and what happens to unpaid and/or unearned commissions when the employment is terminated.  Failure to consider and include such provisions can lead to costly litigation.

    If you have a commission plan at your work, review the plan with knowledgeable counsel to ensure the terms are clear and lawful.

    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.

  • IRS Announces Plan to Limit Exposure for Misclassification Claims

    Employers who incorrectly classify employees as independent contractors or non-employees are responsible for paying the taxes that were not previously withheld.  The Internal Revenue Service may also seek penalties for the unpaid taxes.  The IRS just announced a new program that allows qualifying employers the opportunity to get into compliance by making a minimal payment covering past payroll tax obligations rather than waiting for an IRS audit.

    To be eligible, an applicant must:

    • Consistently have treated the workers in the past as nonemployees,
    • Have filed all required Forms 1099 for the workers for the previous three years
    • Not currently be under audit by the IRS, the Department of Labor or a state agency concerning the classification of these workers

    According to the IRS announcement:

    The new Voluntary Classification Settlement Program (VCSP) is designed to increase tax compliance and reduce burden for employers by providing greater certainty for employers, workers and the government. Under the program, eligible employers can obtain substantial relief from federal payroll taxes they may have owed for the past, if they prospectively treat workers as employees. The VCSP is available to many businesses, tax-exempt organizations and government entities that currently erroneously treat their workers or a class or group of workers as nonemployees or independent contractors, and now want to correctly treat these workers as employees.

    Interested employers can apply for the program by filing Form 8952, Application for Voluntary Classification Settlement Program, at least 60 days before they want to begin treating the workers as employees.

    Employers accepted into the program will pay an amount effectively equaling just over one percent of the wages paid to the reclassified workers for the past year. No interest or penalties will be due, and the employers will not be audited on payroll taxes related to these workers for prior years. Participating employers will, for the first three years under the program, be subject to a special six-year statute of limitations, rather than the usual three years that generally applies to payroll taxes.

    You can view the official announcement at the IRS website.  Employers interested in taking advantage of the VCSP should speak with counsel familiar with employee/independent contractor issues as well as a tax specialist.

    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.

  • Follow Up on Current Version of AB 889 – Domestic Workers Bill of Rights

    I hope you were able to listen to the discussion this morning on KQED regarding the Domestic Workers Bill of Rights.  Unfortunately I was not able to address an area of the law that gives me the greatest concern: This bill would unduly broaden the definition of employer, unnecessarily increase who will be considered an employee, and create additional burdens on homeowners and occupants with respect to non-caregiver workers.  I apologize in advance for the length of this post (I usually try to keep them brief), but there is some background that I think is necessary.

    Putting aside the issue of whether personal attendants/caregivers should or should not be entitled to overtime, AB889 broadens the definition of an employer.  Under most wage orders, an employer is anyone who exercises control over the wages, hours or working conditions of the employee. (See Martinez v. Combs.) Court decisions have agreed that corporate officers and directors are not considered employers.  AB889, however, includes corporate officers or executives who directly or indirectly through third parties exercise control over wages, hours or working conditions of employers.  In essence, the bill eradicates the typical corporate shield that is a significant benefit of the corporate structure.

    Let’s consider how this broad definition could impact the typical independent contractor relationship most homeowners have with non-caregivers.  I’m talking about the gardener, the roofer, the pool cleaner, etc..  If you, as the homeowner, control the working conditions, then you are the employer.  If you decide on the wages you will pay or what hours the person will come into your home, then you are the employer.  You will not be able to hire a sole proprietor with no employees because otherwise you are arguably controlling the wages, hours and working conditions of the employee.  If you hire a company with employees, then hopefully the company will control the hours and wages, but I’m not so sure about the working conditions.

    Additionally, AB889 modifies the workers’ compensation laws to apply to any person who performs any work at or on your home regardless of how long they work at the home.  Labor Code Section 3351 defines who is an employee for workers’ compensation purposes.  Workers’ Compensation laws not only require workers’ compensation insurance coverage for all employees, but also requires employers to provide notice of certain rights under the Workers’ Compensation laws.  Currently, Labor Code Section 3352(h) excludes person employed by the homeowner for less than 52 hours in the 90 calendar days preceding the date of injury from the definition of employee.  AB889 deletes the 3352(h) exemption.  What that means is that you, as a homeowner, will need to carry workers’ compensation insurance for any person providing services to your home, such as gardeners, construction workers, pest control servicemen, cable installers, etc.  You will have to have workers’ compensation insurance for them even if they only come to your house one day for a couple of hours and even if they are covered by their own workers’ compensation insurance.  You will also have to provide them notification of their workers’ compensation rights.

    AB889 deletes a similar provision in Labor Code Section 226.  Labor Code Section 226 requires employers to provide itemized pay stubs to all employees.  The pay stubs must have specific information such as hours worked, wage rates, last four digits of the employee’s social security number, etc.  Currently, there is an exemption to that rule for employees employed by the owner or occupant of a residential dwelling whose duties are incidental to the ownership, maintenance or use of the dwelling.  AB889 takes away that exemption.  Like the Workers’ Compensation laws discussed above, that means you will have to provide a pay stub to your gardener, cable installer, home improvement contractor, etc.

    Regardless of which side of the aisle you are on regarding overtime entitlements for caregivers, the other changes proposed by AB889 create a significant burden on everyone, overly broadens the definition of employer, and imposes unwieldy requirements in situations that do not need reform.  I encourage you to read the bill.  Talk about the issue with your friends, families and co-workers, and come to your own conclusions regarding whether this bill is the appropriate way to resolve the problems.  Then, write your representative and let them know your thoughts.  That’s what I’m going to do.

    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.

  • Do you know whether you have to pay your employees overtime wages?

    Powerhouse auditing firm PricewaterhouseCoopers recently found out the hard way when the 9th Circuit held that unlicensed junior accountants —  the young accountants who perform the auditing work—may be classified as non-exempt employees. See Campbell v. PricewaterhouseCoopers, LLP, —F.3d—, 2011 WL 2342740 (9th Cir., June 15, 2011) [www.ca9.uscourts.gov/datastore/opinions/2011/06/15/09-16370.pdf].

    What does it mean to be exempt?

    Whether an employee is exempt or non-exempt affects the employer’s obligation to pay overtime. In California, if a non-exempt employee works over 8 hours per day, or over 40 hours in week, then the employer must usually pay time and a half—that is, 1.5x regular wage rate multiplied by the number of overtime hours. Depending on the employee’s hourly wage, frequency of overtime work, and the employer’s number of employees, overtime wages can add up to large amounts.

    But if an employee is correctly classified as exempt, then the employer does not have to pay overtime, no matter how many hours the employee works.

    Obviously, employers have an interest in classifying employees as exempt where possible. However, employers cannot willy-nilly declare all employees exempt, and misclassifying employees can lead to significant penalties for the employer.

    California law generally exempts employees who have executive functions (such as the CEO), administrative functions, and professional functions from overtime pay. The California Labor Commissioner has a list of exempt employees.

    What does this mean for you?

    PwC argued the junior accountants should be exempt from overtime pay under the administrative exemption or under the professional exemption. The 9th Circuit disagreed and held that the junior accountants are not “categorically ineligible” from being non-exempt. Slip op. at 1. That’s a lot of double negatives. Basically, the court reiterated that classifying an employee as exempt depended on the specific facts of the case and that it was possible for a court to find that junior accounts were non-exempt.

    For employers, Campbell raises the specter of the risk of misclassifying employees. If the district court finds that the junior accountants are non-exempt, then PwC may be liable to thousands of junior accountants for unpaid wages going back up to four years before the lawsuit was filed. That’s a lot of money at stake.

    So, bottom line, if you do not know whether your employees are exempt, check with an attorney to analyze the facts and make sure you’re not incurring possible liability.  If you think you are improperly classified, talk with an attorney familiar with California’s overtime laws.

    The Law Office of Phillip J. Griego
    95 South Market Street, Suite 520
    San Jose, CA 95113
    Tel. 408-293-6341

    Original article by Kate Bowerman, Summer Intern at 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.
     
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