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Issue 2 - 2014 Newsletter

In This Issue:

  • Announcement of Our Firm's New Walnut Creek Location 
  • Deductions from Vacation/PTO Sanctioned by a California Court of Appeal
  • New Pregnancy Discrimination Act Guidance

 Announcement: Our Firm Opens Walnut Creek Location

We are very pleased to announce that Simpson, Garrity, Innes & Jacuzzi, P.C. has added a second office in Walnut Creek, California, in order to better serve our clients.  The contact information for our new Walnut Creek office can be found on our homepage at www.sgijlaw.com.

Deductions from Vacation/PTO Sanctioned by a California Court of Appeal

Can an employer deduct partial day increments from an exempt employee’s leave bank?  Can the deductions be for less than four hours?  Last month, a California Court of Appeal answered “yes” to both questions (Rhea v. General Atomics).

This recent case builds on a 2005 court case:  Conley v. Pacific Gas & Electric Co.   In the Conley case, the court validated an employer policy of deducting from an exempt employee’s accrued vacation leave for partial day absences without jeopardizing his or her exempt status.  However, in the Conley case, the employer’s policy only required deductions from its employees’ leave banks for partial day absences of at least four hours.  That court defined “partial day absences” as an absence of four or more hours.  The court did not address whether its conclusion would apply to situations where the employer’s policy provided for deductions as to partial day absences of less than four hours. 

In the recent Rhea case, the court was asked to decide if, under California law, an employer can require exempt employees to use their vacation or PTO leave time when they are absent from work for less than four hours.  The employee was challenging her employer’s policy of requiring exempt employees to use their accumulated annual leave hours when they were absent from work for either partial or full days.  Since 2011, the company had been deducting leave time for partial day absences of any length.  No deductions were taken for weeks during which an exempt employee worked in excess of 40 hours; and if an exempt employee had a negative balance in his or her PTO bank when employment was terminated, no deduction was taken from that employee’s final salary.

The court decided that there is nothing under California law to prohibit an employer from establishing a policy that requires exempt employees to use their vacation or accrued leave time for partial day absences, of any length.  Therefore, according to the court, employers do not violate California law by requiring exempt employees to use vacation or leave time for all partial day absences, regardless of length.

In order to use the rationale of this recent court decision, an employer likely will need to amend certain policies.  We recommend that all policies be amended only after input from competent California employment law counsel.

New Pregnancy Discrimination Act Guidance

The U.S. Equal Employment Opportunity Commission (“EEOC”) recently issued its Enforcement Guidance on Pregnancy Discrimination and Related Issues (“Guidance”).  Under the Pregnancy Discrimination Act (“PDA”), employers may not be motivated by pregnancy, childbirth or related medical conditions, in firing, refusing to hire, demoting, or taking any adverse action against employees. 

The following are some of the views announced in the Guidance which employers should be aware of:

  • The PDA covers not only current pregnancy, but also discrimination based on past pregnancy as well as a woman’s intention to become pregnant.
  • There are no magic words that an employee must say for an employer to be deemed to know about an employee’s pregnancy.  Instead, knowledge may be found when an employee asserts to have been visibly pregnant, wore maternity clothes, and could no longer conceal the pregnancy. 
  • The PDA protects women from being discriminated against for having an abortion or contemplating having an abortion. 
  • The PDA prohibits employers from requiring a pregnant worker who is able to do her job to take leave.
  • In addition to the PDA, the Patient Protection and Affordable Care Act (“Obamacare”) requires employers to provide reasonable break time and a private place for hourly employees who are breastfeeding to express milk.
  • An employer may be required to provide light duty or leave to a pregnant employee even if she does not have a pregnancy-related medical condition that would count as a disability, under some circumstances.

California employees also are entitled to protection under state law.  Employers should be aware that California protections often might be greater than federal protections. 

Issue 3 - 2014 Newsletter
Issue 1 - 2014 Newsletter

Our Locations

Simpson, Garrity, Innes & Jacuzzi, P.C.
601 Gateway Boulevard, Suite 950
South San Francisco, CA 94080
Map and Directions

Tel: 650-615-4860
Fax: 650-615-4861


2175 N. California Blvd, Suite 710
Walnut Creek, CA 94596
Map and Directions

Tel: 925-322-8889
Fax: 925-322-8890


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