Californians Voting for Minimum Wage Increases

On Election Day, voters in four different states passed minimum wage increases. This builds on the momentum already created by more than a dozen other states that have done the same throughout the past two years. According to opinion polls, a significant number of Americans are in support of increasing the federal minimum wage – currently set at $7.25.

Here in California, three cities voted on minimum wage hikes: Oakland, San Francisco and Eureka. San Francisco and Oakland will see approximately 190,000 workers receive pay increases as a result of the minimum wage hike. Eureka workers, on the other hand, shouldn’t expect the same. Eureka rejected the measure. Over the past two years, 10 other cities and counties have done the same throughout California.

San Francisco currently has a minimum wage of $10.74. Voters passed an incremental wage increase that will reach $15 per hour by 2018. (76% voted yes and 24% voted no). An estimated 142,000 San Francisco workers should see a raise. Incremental wage increases will occur according to the following timeline: Increased to $12.25 in May 2015. Increased to $13.00 in July 2016. Increased to $14.00 in July 2017. Increased to $15.00 in July 2018.  Seattle passed a similar incremental wage increase in June, making them the two municipalities with the highest minimum wage.

Oakland currently has a minimum wage of $9.00 and voted for a wage increase that will reach $12 by 2015. (79% voted yes and 21% voted no). Approximately 40,000-48,000 workers should receive a raise as a result of the vote. The wage increase will occur in March of 2015 and will jump minimum wage from the current $9.00 to $12.25.

Eureka, California has a population of 27,000. It is reportedly the only place in the country that rejected a proposed minimum wage hike at the polls on Tuesday.

It is suspected that the changing landscape that leaves us seeing so much local support for wage increases is a result of the increasingly loud and powerful movement of low-wage workers who are calling attention to the struggles created by their low paying jobs. The last couple years have seen a number of fast food and retail workers step into the spotlight to go on strike to demand wage increases to $15/hour. These individuals and their stories are the likely reason behind much of the impetus felt for wage increases at a state and local level. A full-time worker that earns the federal minimum wage will earn a little over $15,000 per year. This is below the poverty line for any family of two or more.

If you would like to discuss federal, state and local regulations regarding minimum wage requirements, contact the experts at Blumenthal, Nordrehaug & Bhowmik.

Ninth Circuit Ignores Legal Written Policy in Favor of Using Statistical Sampling to Certify Class

September 3, 2014 the U.S. Court of Appeals for the Ninth Circuit upheld a certification of class in Jimenez v. Allstate Ins. Co.: 800 nonexempt insurance claims adjusters claimed that they worked overtime and did not receive payment. This is in spite of the company’s written policy stating that nonexempt employees would be paid for all the hours they work.

The Ninth Circuit based their decision on the discovery that three common questions existed:

1. The existence of an “unofficial” Allstate policy that discouraged employees from reporting overtime.
2. Whether or not employees’ workloads forced them to work overtime (in excess of eight hours in one day or over 40 hours in one week).
3. If Allstate’s timekeeping method resulted in unpaid overtime or underpayment for overtime.

The court discovered that the adjusters weren’t responsible for the preparation of time sheets/clocking in and out. Instead the time cards were set to a default of eight hours each day and 40 hours each week. Supervisors could submit “exceptions” for hours that were worked outside of the default schedule. The Ninth Circuit decided that a common question did exist in relation to the question of whether the timekeeping method resulted in unpaid overtime for adjusters.  

The Ninth Circuit also held that liability for the problem and whether or not the employer should have known its employees were working off the clock could be resolved with statistical sampling. Although, it is important to note that the Ninth Circuit did not specify exactly how the issues could be resolved through statistical sampling.  

This decision could provide a basis for a legal standard, making an employer’s lawful written policy not enough to completely insulate the company from class certification questions. The recent decision is a deviation from previous rulings as in the Supreme Court’s decision in Walmart Stores v. Dukes and Comcast Corp. v. Behrend.

If you have questions regarding class certification or the method of timekeeping used at your place of business, contact the employment law experts at Blumenthal, Nordrehaug & Bhowmik for additional information. 

FedEx Drivers Are Employees, Not Contractors According to the National Labor Relations Board (NLRB)

The recent National Labor Relations Board (NLRB) decision in the FedEx case concluded that drivers are employees, not contractors. Their agreement supports the decisions of many other jurisdictions to date.

The ruling was directly related to the FedEx drivers in the Connecticut terminal of a FedEx ground package Systems Inc. unit. The ruling by the National Labor Relations Board that the drivers are employees and not independent contractors was founded on a wide range of factors that all favored employee status.

A four-member panel ruled over one dissenting vote that FedEx Home Delivery was in violation of the National Labor Relations Act in its refusal to recognize a union and appropriately bargain when they sought to represent the drivers. A closer examination of the relationship between the drivers’ and FedEx made it clear to the board that the drivers fit the criteria of classification as employees.

Traditionally, courts and governing agencies have utilized the now familiar “multi-factor” common law test in order to differentiate between workers who should legally be designated as employees and those who should be designed at independent contractors. Over time a new trend has gradually emerged in which the focus has shifted to include and some might argue, focus on, one single factor: who has control over the individual’s work. It has become apparent that this focus does not always rely on the use of power over the individual’s work, but simply the existence of the possibility to exert power/control over the individual’s work even if it hasn’t been invoked.

If you are unsure of your appropriate classification on the job and fear that you may be being denied benefits through misclassification as an independent contractor, contact the experts in employment law at southern California’s Blumenthal, Nordrehaug & Bhowmik. 

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.