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Issue 2 - 2016 Newsletter

In This Issue:

  • Guidance for Bring Your Own Device (BYOD) Policies
  • New Paid Sick Leave City Ordinances

 

Guidance for Bring Your Own Device (BYOD) Policies

These days, it seems everyone has a cell phone or smart phone.  As a result, many employers opt not to provide company cell phones to employees who already own one.  This can be a costly mistake in today’s litigation-intensive environment.

California Labor Code Section 2802 requires an employer to “indemnify his or her employee for all necessary expenditures or losses incurred by the employee in the direct consequence of his or her duties, or of his or her obedience to the directions of the employer, unless the employee, at the time of obeying the directions, believed them to be unlawful.”

Section 2802 has long been understood to require reimbursement of ordinary business expenses, such as business travel or meals.  However, many employers are surprised to learn that Section 2802 also requires them to reimburse employees for business use of personal cell phones—even if the employee has unlimited minutes or data, or the employee’s personal cell phone is paid for by a third party.  The purpose of this rule is to prevent employers from passing their operating expenses on to their employees.

In Cochran v. Schwan’s Home Service, a customer service manager filed a class-action lawsuit on behalf of 1,500 employees alleging that the employer violated Section 2802 by failing to reimburse employees for expenses related to work-related use of personal cell phones.  The court held, “If an employee is required to make work-related calls on a personal cell phone, then he or she is incurring an expense for purposes of Section 2802.”  To prove liability against an employer, “an employee need only show that he or she was required to use a personal cell phone to make work-related calls, and he or she was not reimbursed.”  The details of the employee’s cell phone plan are irrelevant; what matters is that the expenses were both necessary and incurred.

The court did not provide clear guidance on how much reimbursement is required, holding only that “to be in compliance with Section 2802, the employer must pay some reasonable percentage of the employee’s cell phone bill.”  What is reasonable will vary according to the required usage for each employee.

For employees whose job duties require heavy cell phone, text and e-mail use away from a fixed worksite, it may be more cost-effective for the employer to provide a company-issued phone to the employee.  Alternatively, employers may choose to implement a Bring Your Own Device (BYOD) policy with an agreement to reimburse the employee a fixed percentage of the monthly charges or a flat amount that is reasonably calculated to cover the expected expenses.  In either of these BYOD scenarios, if the actual expenses necessarily incurred exceed the fixed reimbursement amount, the employer must reimburse the excess amount as well.

Keep in mind other considerations when deciding whether to implement a BYOD policy:

  • Non-exempt hourly employees who use personal devices to make and respond to calls, text messages and e-mails outside of work hours must be paid for that time.
  • Ensure that employees know that Company policies on confidentiality, harassment, discrimination, trade secrets and the like apply to BYOD devices too.
  • Take appropriate security precautions to ensure the security of system data, require strong passwords, and know how to protect Company data in the event the device is lost, hacked, or otherwise compromised.
  • Decide who will be responsible for the cost of upgrades, repairs, or replacement of devices lost or damaged while on work time.
  • Know in advance how to remove Company data from a personal device if the employee quits or is terminated.  Some employers will remotely “wipe” (erase) all data on the device; doing this requires notification to employees ahead of time.
  • Not all devices, models, software and apps will necessarily work well together or with Company systems.  Consider limiting what can be used on a personal phone used for Company business.
  • What sort of passwords and security will be required on the phone and who will ensure that these safeguards are kept current


With some advance planning, employers can reap the benefits of a BYOD policy while avoiding potentially costly pitfalls. Simpson, Garrity, Innes & Jacuzzi, P.C. has extensive experience advising employers how to comply with California’s complex labor and employment laws.

 

New Paid Sick Leave City Ordinances

Just when employers were getting used to the 2015 state paid sick leave requirement, more local paid sick leave ordinances are taking effect. San Francisco, Oakland and Emeryville’s paid sick leave ordinances are joined by ones in Los Angeles (July 1st), San Diego (upon certification of election results, no later than July 7th), and Santa Monica (January 1, 2017).  Additionally, San Francisco voters approved amendments to the city’s ordinance that adopt some of the features of state law, while retaining the more beneficial provisions of the local ordinance.  These amendments will go into effect on January 1, 2017.
State law does not pre-empt these local ordinances, so employers must comply with whichever requirement is more protective of the employee.  This can be a compliance challenge, particularly for employers with state-wide operations.
Below are the highlights.  If you have employees in any of these cities, your company should obtain further information about each city’s requirements to ensure compliance.

City of Los Angeles
In April, the City of Los Angeles passed a minimum wage and paid sick leave ordinance that goes into effect on July 1, 2016.  (See article below for the minimum wage rate.)  The city of Los Angeles includes neighborhoods such as downtown L.A., Sherman Oaks, Northridge, LAX, and dozens of others.

Employees who work at least two (2) hours a week within the geographical boundaries of the City of Los Angeles for 30 or more days within a year from the commencement of employment will be eligible for paid sick leave.  The law covers all such employees, with no exclusions.  

Employees will begin accruing paid sick leave on the first day of employment or July 1, 2016, whichever is later.  Employees may use paid sick leave beginning on the 90th day of employment or July 1, 2016, whichever is later.

Employers must provide sick leave either: (1) by providing a lump sum of 48 hours’ paid sick leave to an Employee at the beginning of each year of employment, calendar year, or 12-month period; or (2) by providing the employee with one hour of paid sick leave per 30 hours worked.  However, if the employer has a paid leave or paid time off policy or provides payment for compensated time off that is equal to or no less than 48 hours, no additional time is required under the ordinance.

Employees will be entitled to use up to 48 hours of paid sick leave in each year of employment, calendar year, or 12-month period.  Accrued, unused paid sick leave carries over to the following year of employment, and may be capped at 72 hours.  Employers may alternatively set a higher cap on accrual, or no cap at all.

Employers shall provide paid sick leave upon the oral or written request of an employee for themselves or a “family member” or “for any individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship.”  

An employer may require an employee to provide reasonable documentation of an absence from work for which sick leave is or will be used.

Employers are not required to pay employees for accrued but unused paid sick leave upon termination, resignation, retirement or other separation from employment.  However, if an employee separates but is rehired within one (1) year, previously accrued and unused paid sick leave must be reinstated.

Employers are prohibited from retaliating against any employee for requesting or using sick leave, opposing any practice forbidden by the ordinance, or otherwise asserting their rights under the ordinance.  Any waiver by an employee of the provisions of the ordinance is contrary to public policy, void and unenforceable.  There is no provision for a waiver of the ordinance by a union in a collective bargaining agreement.  The ordinance does not authorize a private right of action.

San Diego
On June 7, 2016, San Diego voters approved a referendum adopting the minimum wage and paid sick leave ordinance that was originally scheduled to take effect on April 1, 2015.  The ordinance became effective on July 11, 2016.

Employees who work at least two (2) hours a week within the geographical boundaries of the City of San Diego will be eligible for paid sick leave.  The law excludes a narrow category of employees from its coverage including those who are exempt from state minimum wage requirements. 

Employees will begin accruing paid sick leave on the effective date of the ordinance, or upon commencement of employment, whichever is later.  Paid sick leave is accrued at a rate of one hour for every 30 hours worked.  Employers are not required to allow accrual of paid sick leave in increments less than 1 hour.

Employees who are not covered by overtime requirements of California law are assumed to work forty (40) hours in each work week unless their regular work week is less than forty hours, in which case sick leave accrues upon that regular work week.

Unlike state law and most other local paid sick leave ordinances, San Diego places no limit on the number of paid sick leave hours an employee may accrue.  However, employers may limit an employee’s use of paid sick leave to forty (40) hours a year.  Further, employers may require employees to use paid sick leave in minimum increments of up to 2 hours.  Unused paid sick leave carries over from year to year.

Existing employees must begin to accrue earned sick leave on the effective date of the Ordinance - July 11, 2016. Employees who start work after July 11, 2016 begin to accrue on their starting date of employment. Employers may limit use of earned sick leave until the employee's 91st day of employment with the employer.

An employer may require reasonable notice of the need to use paid sick leave.  Where the need is foreseeable, the advance notice of intention to use may not exceed seven days prior to the date when such leave is to begin.  Where the need is not foreseeable, the employee is to provide notice as soon as practicable.  Moreover, for absences exceeding three consecutive days, the employer may require reasonable documentation that the use was authorized for purposes referenced above.  However, an employer may not require employee to find a replacement worker to cover his or her paid sick leave as a condition to using paid sick leave.

Employers are not required to pay employees for accrued but unused paid sick leave at separation from the employer.  However, if an employee separates but is rehired within six (6) months of the separation by the same employer, all previously accrued and unused paid sick leave must be reinstated, unless paid out at termination.  Further, should an employee be transferred to a separate division, entity, or location in San Diego, but remains employed by the same employer, s/he is entitled to retain and use all of his/her paid sick leave as before.

Employers that have a paid time off policy that makes available to employees paid leave that may be used for the same purposes and under the same condition as the law requires are not required to provide additional paid sick leave.

Further, employers must keep contemporaneous records of paid sick leave accrual and usage for at least three years.  Employers must also provide written notice to employees about paid sick leave entitlement by posting in a notice in a conspicuous place and by providing to each employee at the time of hire, or by April 1, 2015, whichever is later, written notice of the employer’s name, address, and telephone number and the employer’s obligations under the ordinance.  The notification shall be in English and all languages spoken by more than 5% of the employees.  The City of San Diego will prepare and make available a sample notice for employers to use.

The ordinance prohibits retaliation against any employee for requesting or using paid sick leave, complaining about violations of the ordinance, communicating with any person about any violation or alleged violation, or participating in administrative or judicial action regarding a violation of the ordinance.  The law also provides a private right of action to enforce its provisions and the right to recover attorneys’ fees and costs to a prevailing plaintiff.

Santa Monica
The City of Santa Monica also passed a minimum wage, paid sick leave and service charge ordinance in April that goes into effect on January 1, 2017.  (See article below for the minimum wage rate.)  The Santa Monica ordinance is similar, but not identical, to the Los Angeles ordinance with respect to paid sick leave.

Employees who work at least two (2) hours a week within the geographical boundaries of the City of Santa Monica will be eligible for paid sick leave.  The law covers all such employees, with no exclusions.  

Employees will begin accruing paid sick leave on the first day of employment.  Employees may use paid sick leave beginning on the 90th day of employment or consistent with the employer’s policies, whichever is sooner.

Employers may either allow employees to accrue paid sick leave at the rate of one hour of leave per 30 hours worked, or provide the entire amount of sick leave in a lump sum at the beginning of the year (calendar year, fiscal year, or year of employment).  In calendar year 2017, the minimum amount of leave employees are entitled to is 32 hours for small employers (25 or fewer employees), and 40 hours for large employers (26 or more employees).  In calendar year 2018 and thereafter, the minimum amount of leave employees are entitled to is 40 hours for small employers (25 or fewer employees), and 72 hours for large employers (26 or more employees). If the accrual method is used, sick leave accrues only in increments of one full hour.

Accrued, unused paid sick leave carries over to the following year of employment, and may be capped at the amounts described in the paragraph above for small and large employers for each year, or at a higher amount if the employer’s policy is more generous.  However, if the employer “front-loads” the paid sick leave at the beginning of the year, no carry-over is required.

Employees may use paid sick leave consistent with state sick leave laws.

Employers are not required to pay employees for accrued but unused paid sick leave upon termination, resignation, retirement or other separation from employment.

The provisions of the ordinance may be waived in a bona fide collective bargaining agreement, but may not be waived by individual employees.  Retaliation is unlawful, and taking adverse action against an employee within 90 days of the person exercising rights under the ordinance raises a rebuttable presumption of retaliation.  Aggrieved employees and applicants may file a civil action for violation of the ordinance, and may recover back wages, back sick leave, penalties, reinstatement and/or injunctive relief, and attorney’s fees and costs.  For willful violations, the amount of monies and penalties may be trebled.

San Francisco Amendments
On June 7, 2016, San Francisco voters approved Proposition E, which amends the city’s paid sick leave ordinance effective January 1, 2017.  Proposition E’s stated goal was to amend the paid sick leave ordinance to include provisions that parallel state law where it provides greater protections to employees and greater scope of coverage, and retain existing language where the ordinance offered more protection than state law.  Proposition E also authorizes the San Francisco Board of Supervisors to amend the ordinance in the future if state or federal law provides greater or additional protections than the ordinance, rather than requiring a further vote of the electorate.

The amendments to the ordinance include:

  • Expanding the reasons paid sick leave can be used to include: “care including preventive care”; for purposes related to domestic violence, sexual assault, or stalking; and for purposes related to bone marrow or organ donation (by the employee or a family member);
  • For employees hired after January 1, 2017, accrual begins on the first day of work;
  • Paid sick leave can be used 90 calendar days after the start of employment;
  • Employers may continue to allow employees to accrue paid sick leave at the rate of one hour per 30 hours worked, or may in their discretion make a lump-sum upfront allocation available to the employee at the beginning of a 12-month period (year of employment, calendar year, or other 12-month period).  If an upfront allocation is made, it is treated as an advance on accrued paid sick leave, and must be documented in a written policy or in a writing to the affected employee;
  • The applicable rate of pay for paid sick leave can be calculated by any of the three methods permitted by state law, provided that the amount is at least equal to the San Francisco minimum wage;
  • The definition of “family member” was amended to conform to state law by adding “person in loco parentis”;
  • Adoption of the state law requirement that previously accrued and unused paid sick leave be reinstated upon rehire within one (1) year of separation; and 
  • Employers must specify the amount of San Francisco paid sick leave available to the employee on the itemized wage statement.

 

New and Increased Local Minimum Wage Requirements Also Take Effect July 1, 2016
You probably know that the California state minimum wage is currently $10.00 per hour—but did you know that numerous cities and counties in the state have local minimum wage ordinances that require a higher rate?  And sixteen of them require employers to post a notice about the local minimum wage?

Berkeley ($11.00; increasing to $12.53 on October 1, 2016)
El Cerrito ($11.60)
Emeryville ($13.00 for businesses with 55 or fewer employees; $14.82 for businesses with 56 or more employees)
Long Beach ($13.80, hotel workers only; no poster but written notice to employees required)
Los Angeles City ($10.50 for businesses with 26 or more employees; $15.37 for hotel workers)
Los Angeles County ($10.50 for businesses with 26 or more employees)
Mountain View ($11.00)
Oakland ($12.55)
Palo Alto ($11.00)
Pasadena ($10.50 for businesses with 26 or more employees
Richmond ($11.52)
San Diego ($10.50)
San Francisco ($13.00)
San Jose ($10.30)
Santa Clara ($11.00)
Santa Monica ($10.50 for businesses with 26 or more employees
Sunnyvale ($10.30)

Issue 3 - 2016 Newsletter
Special Alert - May 2016

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South San Francisco, CA 94080
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Tel: 650-615-4860
Fax: 650-615-4861


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Walnut Creek, CA 94596
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Tel: 925-322-8889
Fax: 925-322-8890


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