• 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.

  • 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.

  • 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.

  • Can I Get My Fees, Please?

    The Ninth Circuit Court of Appeals says the answer may be up to the trial judge.  In  a Fair Housing Act suit, the Ninth Circuit held that the district court properly relied on its own knowledge of customary rates charged by attorneys and its own experience concerning reasonable and proper fees in making an award of attorney fees.

    After the plaintiff won a similar state case, the parties settled their federal dispute.  The plaintiff asked the court to grant its motion for attorneys’ fees.  The court awarded fees, but substantially less than the amount sought.  The trial judge believed the plaintiff should have settled the case earlier and wasted time and money with unnecessary arguments.  The plaintiff appealed.

    The Ninth Circuit concluded that under Lohman v. Duryea Borough, 574 F.3d 163 (3d Cir. 2009), the district court properly considered settlement discussions for the purpose of deciding a litigant’s “success,” and therefore what would constitute a reasonable award.  The Ninth Circuit believed the trial court was in the best position to discern what work was unnecessary and could not find any abuse of discretion in deducting the hours spent on unnecessary motions and arguments.

    Many lawyers and clients want to make every conceivable argument to increase the chance of prevailing.  This is often a wise decision, but lawyers need to be mindful that if a court determines a particular argument or motion was unnecessary or a waste of time, the client may end up footing the bill without hope of recouping those costs from the other side.  I’m a firm believer in ensuring my clients are an integral part of putting together the strategy for the case.  Ingram v. Oroudjian is a good reminder that attorneys and clients need to pick their battles carefully, or at least be mindful of the resources that are being spent.

    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.
     
    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.

  • Leave Entitlements

    I was looking for some information regarding the various leave laws that employers must consider, and came across a guide from the Department of Fair Employment and Housing.  It is a fairly good summary of most of the various leave laws impacting companies doing business in California.  I noticed it does not discuss leaves of absence under USERRA and other available leaves under California’s Military and Veterans Code, but it is still a good summary.

    California employers and employees should ensure they are familiar with the various rights and obligations imposed by the leave laws impacting their work and should review their handbooks to ensure they are up to date.

    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 I-9 Form Issues

    You may recall that the federal government previously indicated that certain forms of identification were no longer sufficient to establish a person’s eligibility to work in the United States. The United States Citizenship and Immigration Services (USCIS) officially announced that a new Form I-9 is now available. Several of the “List A” documents are no longer listed as acceptable proof of identity and eligibility. Employers should no longer use the following documents:

    • Certificate of U.S. Citizenship (Form N-560 or Form N-570)
    • Certificate of Naturalization (Form N-550 or N-570)
    • The Alien Registration Receipt Card (Form I0151)
    • The Reentry Permit (Form I-327); and
    • The Refugee Travel Document (Form I-571)

    The new Form I-9 can be obtained at http://www.uscis.gov/I-9

    A revised Handbook for Employers (M-274) with instructions for completing the Form I-9 can be downloaded at http://www.uscis.gov/files/nativedocuments/m-w74.pdf

    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.