California Labor Law: Governor Brown’s New Law

Governor Jerry Brown recently signed Assembly Bill 1897, creating new Labor Code section 2810.3. The new labor code section created by the Assembly Bill applies to almost all companies with 25+ employees that obtain or receive workers to complete work through the “usual course of business” from other businesses that provide workers (otherwise known as labor contractors). The new law makes such companies liable for three things:

• Payment to contractor’s employees
• Any contractor’s failure to secure appropriate workers’ compensation coverage as required
• Compliant actions regarding occupational health and safety requirements (OSHA) in place

Companies will now have a new statutory liability. The legal contraction of labor services in regards to the new Labor Code section isn’t related to the required finding of joint/co-employment or any type of control over working conditions, the method of payment, scheduling of work hours, or the overall work site environment. Under the new law, each company is liable even if they can exhibit proof that they were not aware of violations that existed or occurred.

The new labor code law applies to workers who are completing their job in the normal course of business on site. California employees who are exempt from overtime (i.e. executive, administrative and professional employees) are excluded from the new law’s reach. There are also a few exemptions from the definition of a “client employer” who is covered under the new law: companies with fewer than 25 workers, companies who use 5 or less labor contract workers at any given time, state organizations, homeowners and home-based businesses who receive labor contract services in their homes, and companies providing transportation services. Additional limited exemptions in relation to non-profit, community organizations, unions, apprenticeship programs, motor club services, cable operators, telephone corporations, etc.

The new law will be effective as of January 1, 2015. For additional information regarding exceptions and exclusions of the new labor law, contact your southern California employment law experts at Blumenthal, Nordrehaug & Bhowmik. 

When Independent Contractors are Actually Employees

Sometimes it’s difficult to know if you are an employee or an independent contractor. Even more often it’s hard to know if you actually en employee even though you’re called an independent contractor. If you’re not sure, you might be one of the many who are “employees” in everything but title.

You might be an “employee” if you:

• Work for ONLY one company
• Put in very long hours
• Are under close supervision 

Why should you care if you are classified as an employee or as an independent contractor?

1. Independent contractors pay self-employment taxes.

2. Independent contractors do not qualify for state unemployment relief if they are let go or not “renewed.”

3. Independent contractors are not eligible for employer-paid benefits.

The IRS has a multipart test in place that has to be met in order to qualify for legitimate independent contractor status. If it is determined that an employer has been misclassifying employees as independent contractors according to the multipart test, employers may be subject to penalties assessed for back employment taxes and/or overtime wages for workers.

In recent news, the FedEx drivers in California and Oregon, that were considered independent contractors by the company, were dubbed employees by the court. Now there are drivers for both Uber and Lyft car-sharing services (popular in southern California urban areas) that are also challenging their independent-contractor status.

This isn’t an issue that is likely to go away any time soon. Many businesses tend to push the limits on legal definitions in order to keep labor costs low, and avoid passing official employee count thresholds that can trigger additional coverage requirements and programs (such as family leave and health care).

That’s not to say that being an independent contractor is a bad thing. Independent contracting has a lot of benefits for both the employer and the contractor. A lot of workers enjoy the freedom is can offer. They can set their own hours and the pace of their work. They can work for a variety of different clients. They can deduct their own business expenses from their income. But the problem comes when a worker is hired as an “independent contractor” and then treated like an employee. This set up takes all the benefits out of the arrangement on the side of the worker leaving the employer with all the “good” cards.

If you suspect that you might be misclassified as an independent contractor, contact an expert in southern California employment law as soon as possible at Blumenthal, Nordrehaug & Bhowmik. 

7 Tips on Negotiating Severance

If you suspect or are completely aware that you are about to be presented with a separation agreement at work, you might want to start thinking about your severance package. What’s important to you? What do you expect? What can you accept? What can you NOT accept? If you have no idea where to start when attempting to outline a basic needs and wants list for your soon to be presented severance package, take a few minutes to figure it out before you are asked for a decision on the matter.

Here are 7 Things to Consider in Relation to Any Severance:

1. Know both sides of the agreement: Don’t just know what you’re getting from the company; know what the company is getting from you. And vice versa. You separation agreement signature is worth money since it limits the number legal issues you, the “terminated employee”, can bring against the company.
2. The range of potential financial outcomes is “wide”: Top executives can usually expect to see their severance terms spelled out in their contract of employment. For others, from corporate ranks to upper-level management, things are more unclear. Informal guidelines and the rule of thumb come into play. The rough average is two weeks of pay for every year of employment (it can range from 1-4 weeks depending upon the circumstances at hand).
3. What you get depends on specific factors: Tenure on the job, performance records, reason for the termination, etc. can all come into play when the numbers are being discussed.
4. Work History: The first thing you probably want to examine with an employment lawyer in relation to severance negotiations are any documents that are available that chart your history at the company and how well you performed for them on the job. Documentation could determine whether you have a discrimination case to pursue or not. At the very least, hints of untoward behavior could lead to increased leverage for you during negotiations.
5. Your knowledge of company flexibility: It’s useful if you have some knowledge regarding what is off limits and what you can openly ask for when negotiating your severance. Some things are simply outside of your boss’s control. For instance, your boss can’t make exceptions to laws in place. There’s also not a lot of leeway regarding employee benefits. But many employers have funds earmarked for outplacement services.
6. Tap into relationships: If it’s useful, call relationships you have with bosses, human resource directors, etc. into play during negotiations. It can make a difference. If you have a close relationship with the boss or someone who will be on the other side of the severance negotiation table use it. And make sure to let you employment lawyer know that the relationship exists, too.
7. Look to the future: It’s not all about money. This agreement could affect your long-term career. You want to consider future job references and work history, etc. before you sign off on the severance.

Remember, at that first meeting when you are presented with your severance, you’ll be in shock. Even if it’s not a complete surprise, don’t sign anything. Try to politely request a meeting at a later date to wrap things up and get in touch with an employment law attorney at Blumenthal, Nordrehaug & Bhowmik to handle your severance negotiation. 

Discrimination Case Filed by Ex-Wilson Elser Attorney

Jodi Ritter, a former nonequity partner of Wilson Elser Moskowitz Edelman & Dicker sued the firm with claims that she was subjected to harassment and discrimination for her choice to have children. She left the firm in late 2012.

Ritter described the state at the firm by stating, “By contrast, women who did not have children and who availed themselves of affairs with partners were systematically rewarded and treated better than women who chose to have children and families.”

The firm, in response to the claims made in the suit, said that the allegations were baseless and lacking in any legal merit. They advised that they would be vigorously defending themselves and they were looking forward to the adjudication of the matter. The firm filed Motion to Dismiss on Friday claiming that claims are wholly without merit and precluded by the arbitration clause of her partnership agreement.  

Ritter spent five years as a special narcotics prosecutor in the Brooklyn District Attorney’s Office before joining Wilson Elser in 1997. She stated that she didn’t have any problem meeting her billable hour quota and that she received bonuses and raises consistently until she became pregnant. Ritter announced her pregnancy in 2002. The chair of the firm’s labor and employment litigation practice, Ricki Roer, allegedly pulled Ritter aside and said, “That’s why women can’t move up in this firm.” Roer continued to explain that getting pregnant could have a negative impact on any attempt Ritter had to move up as a female in the Wilson Elser firm. Roer continued by saying that women who do get pregnant in the workforce make it harder for women who want to make a career because it makes women look weak.

Ritter gave birth to twins in January 2003. After three months of maternity leave Ritter’s twins were still in intensive care. She requested additional time. She was advised that her job could not be held if she could not return after the three months. Ritter said she had to get permission to spend one more month with her twins from the regional managing partner. In May of 2003, Ritter was required to attend a Women’s Bar Association event. Her twins were having health issues. After four hours, she asked a partner at the table, Jerold Ruderman, if she could leave to care for her sick children. She claims he said no and that she couldn’t leave an empty seat at the table where Mr. Ruderman’s wife (a sitting judge) was seated.

Ritter was transferred to the firm’s White Plains office approximately one year after her children were born.

Ritter also claims:

• Roer was known to rebuff women’s requests for childcare accommodations.
• When her husband became ill, the firm’s only concern was her ability to maintain her billable hours.
• Women in the firm who made themselves available to male partners were protected.

Upon her firing in December 2012, Ritter was told that the firm had too little work to sustain her position. She argued that she had a number of open cases as well as a number of clients preparing to send her more work. At that time she had billed 1,930 hours. She was one week away from billing 1,950 hours. And her average billing from years past was 2,000 hours per year.

Ritter filed suit because, she claims, the firm affected her ability to further he career. She worked there for more than 16 years. As Ritter’s attorney said, “She gave her life there.” Ritter is seeking damages based on lost wages and pain and suffering as well as punitive damages.

For more information on discrimination in the workplace or wrongful termination please contact the southern California employment law experts at Blumenthal, Nordrehaug & Bhowmik. 

New Employment Laws In Play Regarding Licenses for Undocumented Individuals

In 2013, the Department of Motor Vehicles was authorized to issue an original driver’s license to an individual who is not able to submit proof that their presence in the United States is authorized under federal law. (California Assembly Bill 60 created Vehicle Code section 12801.9). This same bill also made it illegal to discriminate against a person who holds such a driver’s license under the Unruh Civil Rights Act. AB 60 is to take effect on January 1^st, 2015.

The licenses issued to undocumented persons under the new law will have a distinctive design/color and will have text on the photo indicating limitations for official federal purposes. Additional provisions related to the licenses were included in Assembly Bill 1660 (passed in September) to provide protections in employment context. Employers will be prohibited from discriminating against a person because they hold a license that was issued under Vehicle Code section 12801.9. Employers will be prohibited from requiring workers to present a driver’s license unless possessing one is required by the employer or otherwise permitted by laws in place. Additional provisions have been put in place to protect holders of licenses issued under Vehicle Code section 12801.9 from unlawful release of private information, use to establish citizenship or immigration status for investigation, arrest, citation, etc.

The new licenses will not be acceptable to establish eligibility for employment and they will not be acceptable for any official federal requirements or purposes. The new laws will not change the employers’ rights regarding obtaining information in order to establish an employee’s authorization to work (required under federal law). Employers will still be required to have employees provide documentation and submit the I-9 documentation to determine work eligibility. Employer action taken in accordance with federal Immigration and Nationality Act will not be in violation of the new laws regarding the licenses and the use of licenses issued under Vehicle Code section 12801.9.

For additional information regarding the new laws regarding issuance of licenses for undocumented persons or to get further information on federal work eligibility laws, contact the southern California employment law experts at Blumenthal, Nordrehaug & Bhowmik. 

Labor Law in Place to Help Employees Beat the Heat

A newly amended California labor code provision turns up the heat on employers in order to protect employees from the heat. Amendments allow private enforcement of laws regarding heat-illness prevention. Previously, they were imposed only by the California Occupational Safety and Health Administration (OSHA) with limited resources.

With the new provision, California employers must be even more fastidious about guarding their employees from the sun’s heat. To do so they must provide employees with cool down periods or they might end up facing litigation en masse. Any employer who has an outdoor space at their place of employment will find it vital to have a heat-illness prevention program set in motion so that employees are both allowed and encouraged to rest out of the heat for at least 5 minutes whenever they feel in danger of overheating. 

Employers may feel put out by the rules. They are required to provide shade for employees who work in the sun (especially during sunny days). This can sometimes be difficult. Necessary cool-down periods any particular employee might need are unknown and cannot be scheduled ahead of time. So employers may find regulating employee behavior to ensure they are meeting the standards for heat-illness prevention difficult. It is recommended that California employers review the policies they have in place and that they offer renewed training for managers who will be responsible for compliance and the maintenance of their compliance records.

If you have questions regarding the regulations your California employer may be required to adhere to, contact Blumenthal, Nordrehaug & Bhowmik, your southern California employment law experts. 

Ruling of California Supreme Court: Federal Aviation Authorization Act Does Not Preempt California Meal and Rest Break Claims

A recent decision by the California Supreme Court will affect truck drivers throughout California. The finding that the Federal Aviation Authorization Act does not preempt California meal and rest break claims means that any truck driver in or through California is entitled to take a thirty (30) minute uninterrupted meal period prior to their fifth (5^th) hour of work. Drivers are entitled to this benefit regardless of the crossing of state lines during their route or the payment of overtime to the driver.

The issue originated with a meal break class action lawsuit filed against Penske Logistics that Penske won at the district court level. The panel of judges held that the meal and rest break laws in California are unrelated to Penske’s “prices, routes or services” and would therefore not be preempted by the Federal Aviation Administration Authorization Act of 1994. The appeals court also stated that it was never intended to preempt general state transportation safety, etc.

The meal and rest break law will add costs for motor carriers and motor carriers being affected are, of course, disappointed with the decision. The court defended their ruling stating that the law does not “set prices, mandate or prohibit certain routes, or tell motor carriers what services they may or may not provide, either directly or indirectly.”

The decision is excellent news for truck drivers on California roads.

For more information on California meal and rest break laws, contact your Southern California employment law experts at Blumenthal, Nordrehaug & Bhowmik.