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Issue 3 - 2015 Newsletter

In This Issue:

  • Laura E. Innes (1956-2015)
  • New Employment Laws for California Employers
  • "Disability Accommodation Leave" - Should Not Be Forgotten


Laura E. Innes (1956-2015)

Laura Innes, a firm founder, extraordinary attorney, teammate and close friend, passed away this year. Laura was a preeminent labor and employment law attorney and will greatly be missed by her family, friends, firm and clients.


New Employment Laws for California Employers

This year, Governor Brown signed several new employment laws affecting California employers. Here are highlights of the major laws, and some steps California employers should consider taking to comply.

Gender Wage Equality
● SB 358: Amends Labor Code §1197.5 to prohibit employers from paying any employee at a wage rate less than that paid to employees of the opposite sex for doing substantially similar work – when viewed as a composite of skill, effort, and responsibility, performed under similar working conditions. Does not have to be the exact same job.
● Employer must be able to demonstrate that any wage differential is based ENTIRELY and REASONABLY upon enumerated factors:
       - seniority system;
       - a merit system;
       - a system that measures earnings by quantity or quality of production; or
       - a bona fide factor that is not based on or derived from a sex-based differential in compensation and that is consistent with a business necessity.
● Prohibits retaliation against employees who ask about or discuss wages paid to co-workers, and it clarifies their ability to claim retaliation.
● Employees who can prove they were discharged, discriminated against, or retaliated against in violation of the amended statutory scheme are entitled to seek reinstatement, recover lost wages and benefits, and obtain equitable relief.
● Expressly prohibits an employer from preventing its employees from disclosing their own wages, discussing the wages of others, inquiring as to other employees’ wages, or assisting another employee in asserting his or her rights under Labor Code §1197.5.
● Employers are not obligated to disclose wages.
● Extends requirement to keep records related to the terms and conditions of employment, including wage and job classification, from 2 years to 3 years.

What to do? Consider an Audit!
- Review job descriptions in conjunction with current salaries.
- Review compensation policies and practices (including handbook policies).
- Are there any pay differentials? Why? It’s your burden!
- What are your internal complaint procedures?
- Train managers (especially those who are making compensation decisions).
- Make sure managers, supervisors, etc. are aware of the right to ask co-workers about their compensation.
- Update internal record retention policies.
- Contact employment counsel: should the audit be done under the auspice of the attorney/client privilege?

Limited Cure for PAGA Violations
● AB 1506: Urgency statute, effective 10/2/2015.
● Upon receipt of a PAGA violation notice, employers may cure certain violations of Labor Code §226(a) regarding itemized wage statements:
       - Failure to include inclusive dates of the pay period
       - Failure to show correct name and address of legal employer
● To cure, employer must provide fully-compliant itemized wage statement to each aggrieved employee – potentially back as far as three years.
● Cure only available once per 12-month period for same violations. Cure not available for other violations of §226(a).

Piece Rate Pay Gets More Difficult
● AB 1513: Makes it more difficult for employers who pay on a piece rate basis. Starting 1/1/2016:
       - Must pay piece-rate employees for rest and recovery periods (and all other periods of “nonproductive” time) separately from (and in addition to) their piece-rate compensation.
● Specifically, the following rates for rest and recovery periods and “other nonproductive time”:
       - Rest and recovery periods: Employers must pay a piece-rate employee for rest and recovery periods at an average hourly rate that is determined by dividing the employee’s total compensation for the workweek (not including compensation for rest and recovery periods and overtime premiums) by the total hours worked during the workweek (not including rest and recovery periods).
       - Other nonproductive time: Employers must pay piece-rate employees for other nonproductive time at a rate that is no less than the minimum wage. If employers pay an hourly rate for all hours worked in addition to piece-rate wages, then those employers would not need to pay amounts in addition to that hourly rate for the other non productive time.
● Make sure the wage statement is correct. Employees must specify additional categories of information on a piece-rate employee’s itemized wage statement:
       (i) the total hours of compensable rest and recovery periods;
       (ii) the rate of compensation paid for those periods; and,
       (iii) the gross wages paid for those periods during the pay period. If employers do not pay a separate hourly rate for all hours worked (in addition to piece-rate wages), then the employer must also list (a) the total hours of other non productive time, (b) the rate of compensation for that time, and (c) the gross wages paid for that time during the pay period. - These types of errors are not subject to cure under PAGA.

Changes to Mandatory Paid Sick Leave Law
● AB 304: As of July 1, 2015, California employers are required to provide paid sick leave to all employees working 30 days or more within a year from the commencement of employment under the Healthy Workplaces, Healthy Families Act.
● The Act was amended July 13, 2015.
● Eligibility requirements:
       - Clarifies employees must work for 30 days in California for same employer.
       - Definition of “employee in the construction industry” changed by eliminating the requirement that the employee perform “on site” work.
       - Added another exemption to sick leave law for retired annuitants of a public entity, as defined in the amendments.
● Accrual:
       - Employers may use an alternative method of accrual (other than one hour for every 30 hours worked) as long as the following criteria are met:
              a) Accrual is on “regular basis”;
              b) Employee has no less than 24 hours of paid sick leave or paid time off by (1) by the 120th calendar day of employment; (2) by each calendar year; or (3) in each 12-month period.
● Replenishment option:
       - Clarified that 24 hours/3 days of sick leave may be provided at beginning of each year of employment (anniversary year), calendar year, or 12-month period.
● Use requirement:
       - Clarified may limit use of sick leave to 24 hours/3 days within an anniversary year, calendar year, or 12-month period
● Existing Paid Sick Leave/PTO Policies:
       - Employers also do not need to provide additional sick leave if the employer had a paid sick leave/PTO policy in place before 1/1/2015, that meets the following criteria:
              a) Employees accrue sick time/PTO on a regular basis;
              b) Employees accrue no less than one day or 8 hours of sick time/PTO within three months of each calendar year or 12 month period; and,
              c) Employees eligible to earn at least three days or 24 hours of sick time/PTO within 9 months of employment.
● Existing Paid Sick Leave/PTO Policies:
       - If an employer modifies the accrual method it had in place prior to 1/1/2015, it must comply with the accrual requirements in the paid sick leave law, or provide the full amount of leave at the beginning of each year of employment, calendar year, or 12-month period.
● Reinstatement of Accrued Sick Leave:
        - If sick leave is paid out at termination, does not need to be reinstated upon rehire.
● Recordkeeping:
       - Clarified that employers have no obligation to inquire into or record the reasons an employee uses paid time off or paid leave.
● Calculation of Paid Sick Leave:
        - Amended law provides three options to employers:
              a) For nonexempt employees: may calculate paid sick leave in the same manner as the regular rate of pay for the workweek in which an employee uses paid sick time, regardless of whether the employee works overtime during the week;
              b) For nonexempt employees: may divide the employee’s total wages (not including overtime premium pay) by the total hours worked in the full paid periods of the employee’s prior 90 days of employment; or
              c) For exempt employees: may calculate paid sick leave in the same way that wages for other forms of paid leave time are calculated.
● San Francisco, Oakland and Emeryville continue to enforce their own local sick leave ordinances, with separate requirements.

Expanded School Activities Leave
● SB 579: Expands coverage of California’s school activities leave (Family School Partnership Act, Labor Code §230.8) to include day care providers and cover child care provider/school emergencies, and the finding, enrolling, or reenrolling of a child in a school or day care. Extends protections to an employee who is a step-parent or foster parent or who stands “in loco parentis” to a child.
● Labor Code §230.8: Allows for 40 hours per year (not exceeding 8 hours in a calendar month)
       - Prohibits discharge or discrimination in any way for taking such time
       - Applies to employers with 25 or more employees
● Definition of “family member” for kin care purposes (Labor Code §233) changed to conform to state paid sick leave law.

E-Verify System
● AB 622: Except as required by federal law, employers may not use the E-Verify system to check the employment authorization status of:
       - An existing employee.
       - An applicant who has not been offered employment.
● Employer must provide “Tentative Nonconfirmation Notice” (TNC) or other information specific to employee’s E-Verify case “as soon as practicable.”
● Penalty of $10,000 per violation!

Grocery Workers
● AB 359/AB 897: Grocery store employers who buy a store must hire from a list of the previous store’s eligible employees within 90 days of the acquisition:
       - Applies to grocery stores over 15,000 sq. ft.
       - Eligible employees must have worked for the predecessor employer for at least 6 months; managers, supervisors and                           confidential employees not covered.
       - Records of offers must be kept for at least 3 years.
       - Does not apply if the store has been closed for 6 months or more.

Health Care Industry – Meal Period Waivers
● Effective 10/5/2015, SB 327 restored health care workers’ ability to voluntarily waive one or two meal periods on shifts exceeding 12 hours.
● Overturned the recent court decision in Gerard v. Orange Coast Memorial Medical Center (2015) that had thrown the validity of such waivers into doubt.
● Applies only to business covered by Wage Orders 4 and 5, and to employees within the “health care industry,” as defined by law.
● Consult with legal counsel about implementing a meal period waiver process.

This and That
● SB 623 prohibits employees from being denied workers’ compensation benefits based on their citizenship or immigration status.
● AB 1509 now protects employees from retaliation for complaints made to employers by family members (e.g., whistleblowing, complaints about pay and working conditions).
● AB 970 gives the Labor Commissioner (DLSE) authority to enforce local minimum wage and overtime laws enacted by cities and counties.
● SB 501 changes the wage garnishment laws effective 7/1/2016. Maximum amount that can be garnished is the lesser of:
       - 25% of the individual’s disposable earnings for that week; or
       - The amount by which the individual’s disposable earnings for the week exceed 40 times the state minimum hourly wage in effect (i.e., over $4,000/wk.) or applicable local hourly minimum wage, if higher.

Purpose of this change is to eliminate a perceived disincentive to earn more wages if subject to a garnishment order.
● SB 667 revises the waiting period for SDI claims, effective 7/1/2016. Individuals who have already served one 7-day waiting period for an initial claim need not serve a second 7-day period for a same or related claim within 60 days.

“Disability Accommodation Leave” – Should Not be Forgotten

What if your employee is not eligible for Family & Medical Leave (FMLA) or California Family Rights Act (CFRA) time off? What if your employee exhausted all of his/her FMLA and CFRA time off? What if your Company is not large enough to be covered by the FMLA and CFRA laws? Does the employee have any rights?

Employers must also consider if an employee is eligible for “disability accommodation leave” under the Americans with Disabilities Act (ADA) and/or the California Fair Employment & Housing Act (FEHA).

An employee must be “disabled” to qualify for a disability accommodation leave. However, the legal definition of “disability” is quite liberal. The amount of time-off for the leave of absence must be reasonable and not pose an undue hardship on the employer. What is reasonable and what is an undue hardship depends on the particular job and the employer’s circumstances.

Below are some regulations and guidance from the federal and California agencies regarding disability accommodation leaves of absence.

Paid or unpaid leaves of absence: When the employee cannot presently perform the essential functions of the job, or otherwise needs time away from the job for treatment and recovery, holding a job open for an employee on a leave of absence or extending a leave provided by the CFRA, the FMLA, other leave laws, or an employer’s leave plan may be a reasonable accommodation provided that the leave is likely to be effective in allowing the employee to return to work at the end of the leave, with or without further reasonable accommodation, and does not create an undue hardship for the employer. When an employee can work with a reasonable accommodation other than a leave of absence, an employer may not require that the employee take a leave of absence. An employer, however, is not required to provide an indefinite leave of absence as a reasonable accommodation.


1. An employee with a disability may need leave for a number of reasons related to the disability, including, but not limited to:

  • obtaining medical treatment (e.g., surgery, psychotherapy, substance abuse treatment, or dialysis), rehabilitation services, or physical or occupational therapy; 
  • recuperating from an illness or an episodic manifestation of the disability; 
  • obtaining repairs on a wheelchair, accessible van, or prosthetic device; 
  • avoiding temporary adverse conditions in the work environment (for example, an air-conditioning breakdown causing unusually warm temperatures that could seriously harm an employee with multiple sclerosis); 
  • training a service animal (e.g., a guide dog); or 
  • receiving training in the use of braille or to learn sign language.

2. May an employer apply a "no-fault" leave policy, under which employees are automatically terminated after they have been on leave for a certain period of time, to an employee with a disability who needs leave beyond the set period?

No. If an employee with a disability needs additional unpaid leave as a reasonable accommodation, the employer must modify its "no-fault" leave policy to provide the employee with the additional leave, unless it can show that: (1) there is another effective accommodation that would enable the person to perform the essential functions of his/her position, or (2) granting additional leave would cause an undue hardship. Modifying workplace policies, including leave policies, is a form of reasonable accommodation.

3. Does an employer have to hold open an employee's job as a reasonable accommodation?

Yes. An employee with a disability who is granted leave as a reasonable accommodation is entitled to return to his/her same position unless the employer demonstrates that holding open the position would impose an undue hardship.

Issue 1 - 2016 Newsletter
Issue 2 - 2015 Newsletter

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Walnut Creek, CA 94596
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