How is California’s Labor Bill AB5 Affecting the Covid-19 Crisis?

In the current landscape, many of California’s independent contractors and freelancers claim Labor Bill AB5 adds fuel to the fire during the Covid-19 crisis as it further restricts work opportunities.

Unprecedented Unemployment During Covid-19 Has Many Looking at AB5:

The COVID-19 crisis has resulted in unprecedented levels of unemployment across California. With more workers being laid off every day, thousands are starting to look at California Labor Bill AB5 and claim it is making the economic outlook worse.

How Does California Labor Bill AB5 Affect California Amid Covid-19 Crisis?

Legislators, business owners, and many economists are starting to claim that the 2019 bill impedes the state economy and places a burden on the health care system at a point when it is already strained by the novel coronavirus and resulting Covid-19 crisis. According to local media, many hospitals rely on independent contractors to provide health services (particularly in rural areas). With thousands of California workers facing Covid-19 pandemic inspired unemployment, AB5 leaves them in a tight spot, where it’s close to impossible to take on temp jobs from home.

Will the Governor Suspend AB5 Amid Rising Unemployment Due to Covid-19?

Republican candidate for the 50th Congressional District, Darrell Issa, asked Governor Newsom to suspend AB5, insisting that independent contractors and freelancers should be allowed to work. Over 17,000 have joined the Freelancers Against AB5 Facebook, claiming the new law strips them of their freedom, flexibility, and livelihood. As other politicians join the fray calling for the bill to be repealed, the governor has so far not relented. In response to the governor’s response, petitioners are circulating. One such petition, called Freedom to Work, calls upon citizens to “Repeal AB5 Now” and “join the fight!”

California Labor Bill AB5 Was Designed to Address Rampant Workplace Violations in the Gig Economy:

Legislators designed AB5 to protect more than one million gig economy freelancers by making them eligible for benefits. Under AB5, employers are required to meet strict requirements to classify workers as independent contractors (who do not qualify for employment benefits like health insurance, and unemployment). Even before the coronavirus made itself known, AB5 was inspiring widespread layoffs as companies couldn’t meet the increase in labor costs. When coronavirus arrived on the scene, thousands of California’s freelance workers were already out of work.

California Workforce Calling for Flexible Employment Amid Covid-19 Crisis: 

Lorena Gonzalez, the bill’s author, created the law to push employers to recognize their independent contractors as employees, which would make them eligible for employee benefits. Still, many independent contractors believe the bill backfired and that it takes their rights away. Many Californians are calling for change, insisting that right now, it’s more important than ever to have access to flexible employment. Consumers need to be connected by the services many of these independent contractors provide during the crisis, from online tutors to food delivery drivers and even online health professionals. Activists seeking a repeal of AB5 insist that if the goal is minimizing economic damage, AB5 makes no sense, and is hurting the state’s response to the virus.

If you need to talk to someone about employment law violations related to AB5 or Covid-19, get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in any one of various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.

California Wage Theft Lawsuit: Papa John’s Settles for $3.4 Million

Papa John’s requested approval of a $3.4 million settlement to end a wage theft lawsuit in the Central District of California. According to the lawsuit, Papa John’s allegedly failed to pay workers for mandatory training time. Required training without pay, as described in this lawsuit, violates the Fair Labor Standards Act and California labor law. 

As the case proceeds towards settlement, some are left wondering about issues left unresolved in the case.

Should Companies Be Held Liable for Franchise Wage Violations? 

Should Papa John’s International, Inc. be held liable for wage violations of company franchises? In 2019, about 8.43 million Americans worked for franchises across the nation, many of which were earning minimum wage. As minimum wage workers, as a general rule, they could not afford unpaid training hours. While required on the job training is against the law (this is not in question), it is less clear who is responsible for the wage violation. 

The Avalos v. Papa John’s International, Inc. Case:

Sofia Avalos, along with other California Papa John’s delivery drivers, and a proposed class of hourly employees were all allegedly required to complete online training modules to teach them their job duties and provide the level of service necessary for the position. These required training modules needed to be completed before clocking in or after clocking out for their shift. While they were required to spend time completing the training on Papa John’s corporate site, they were not paid for the time necessary to complete the modules. Workers involved in the suit claim this was a common practice for Papa John’s facilities across the nation. The method of logging the training as complete indicates that Papa John’s International was aware or had reason to be aware that it was being completed “off the clock.” Since the employees’ total number of hours were miscounted, calculations of minimum wage, overtime pay, and final wage statements were also incorrect.

The Settlement Agreement for Papa John’s Wage Theft Suit:

Choosing discretion to a big legal battle, Papa John’s International decided to settle. The settlement agreement designates 30% of the gross fund for worker’s attorney fees and $80,000 for legal costs. $185,000 is to administer the settlement. Corporate-owned store employees who submit a claim will receive a payment up to $166, and franchise employees will receive $50 gift cards.

The Risk of Joint Employment in Avalos v. Papa John’s International, Inc.:

One of the reasons Papa John’s International turned to settlement, in this case, is most likely the risk that the court could decide that Papa John’s, the corporate parent in this scenario, is a joint employer of franchise pizza delivery drivers. Turning to the settlement agreement allows them to avoid this issue as settlements do not create a precedent. Setting aside the $50 “gift card” provision, the lack of a precedent is a victory for the defendant in this case.

If you need to talk to someone about wage theft or if you need to file a wage and hour lawsuit, get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in any one of various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.

California Employers Facing Novel Employment Law Challenges Due to Coronoavirus

California employers are facing new and difficult challenges due to the spread of coronavirus. Many are facing difficult employment law compliance questions.

The spread of the novel coronavirus is presenting extraordinary challenges and the possibility of new responsibilities. Some California businesses are wondering if courts will eventually be asked to judge whether or not alleged actions taken by a company or employer contributed to the spread of the virus?

Increasingly Severe Guidelines & Defining the Legal Duties of California Employers:

The severity of guidelines imposed by California authorities are increasing; bans on movement, bans on gatherings, etc. Privately owned entities throughout the state are unsure how to act, and in some cases, are engaging in over-compliance with sporting event suspensions and workplace closures. Amid the various guidelines and recommendations, what are the legal duties of California employers during the coronavirus crisis? In order to define an employer's legal responsibilities in connection to employment law questions during the Covid-19 pandemic, it's best to pose the questions they are struggling to answer.

What Should a California Employer Do If an Employee Tests Positive for COVID-19?

If a California employee tests positive for COVID-19, the employer should issue a broad warning after considering the potential reach of the exposure, considering all those within any degree of its control. For example, in a 2013 case, the court held Long Island Railroad liable to a cashier at a diner. The railroad knew its employees were entering the diner carrying asbestos on their gear. While the railroad did not own the diner, the court held them liable because they term in the diner's lease allowed the railroad to dictate the diner's hours of operation, which amounted to exercising control over the restaurant. Since they held this "control," they also held a duty to warn. 

What Information Should a California Employer Include in a Warning?

If issuing a warning in response to an employee testing positive for Covid-19, the employer should include all known information. While actual risks may be minimal, the reported risk of death must be factored in alongside the duty to warn. Make the warning as complete as possible while addressing the privacy concerns of the affected employee.

What Protective Measures Should an Employer Take if an Employee Has Covid-19? 

After an employee tests positive for Covid-19, a California employer should take additional reasonable protective measures. When issuing warnings and recommendations, employers should also consider their degree of control over their employees and their employees' required job duties. For example, if an employee cannot complete their job without avoiding potentially affected places, a warning is not sufficient response to a positive Covide-19 test in the workplace. In this situation, the employer has a responsibility to provide employees with a safe workplace. Implement proper infection-control processes to minimize the chance that potentially infected areas and people do not spread the virus. If an employer has concrete information that a workplace may be infected (i.e., an employee's positive Covid-19 test result), there is an inherent duty to remedy the situation. Doing so may require thoroughly disinfecting the workplace and requesting that exposed employees self-quarantine.

How Can an Employer Protect Themselves If Their Workforce is Exposed?

If an employee in the workforce tests positive for Covid-19, the employer should alert authorities and follow official guidance to help show that they were actively seeking to implement appropriate and reasonable measures in response to the situation. It is also a good idea to consider how peers and competitors are responding to similar situations. Many companies have adopted processes that surpass the requirements put in place by health authorities, such as closing offices, closing venues, canceling events, etc. In future cases related to Covid-19, plaintiffs will present (and juries will be allowed to consider) information about measures other companies and groups instituted at the time as examples of appropriate conduct. 

Do California Employers Need to Do Anything if They Are Not Aware of Any Covid-19 Exposure?

If an employer is not aware of any specific contact with coronavirus in their workforce or their business, they can still take reasonable and appropriate actions.

Stay Informed: Be aware of the potential dangers. Designate someone as responsible for keeping informed of the spread of the epidemic and any developments in areas related to the company, any of the company's locations or any of the company's employees. Make sure employees know how to report any suspected exposure.

Alert Employees: Make sure employees are aware of the general risks of the coronavirus and offer them necessary guidance and information regarding how to stay safe, like washing hands regularly throughout the day. 

Implement Reasonable Preventive Measures: As always, employers should maintain a safe workplace. Right now, that means staying ahead of the coronavirus by minimizing chances of infection and exposure in the workplace. Depending on the type of business, this may mean canceling non-essential travel (particularly to areas with high rates of infection), providing sick workers with the chance to stay away from the workplace, encouraging workers to telecommute when possible, etc. Clean and disinfect to keep the workplace free of the SARS -CoV-2 spores that cause COVID-19. Preventive measures will help California employers avoid liability for creating an unsafe work environment.

In these unprecedented times, there are a myriad of potential legal issues related to the spread of the novel coronavirus. If you have questions about California employment law issues connected to the spread of Covid-19, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in any one of various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.

$1.75M Settlement to Resolve Ulta Off-The-Clock Work Claims

In recent news, Ulta agreed to a $1.75 million settlement to resolve four class-action suits claiming multiple California wage and hour law violations.

Tellez, et al. v. Ulta Salon, Cosmetics & Fragrance Inc.:

The case, Tellez, et al. v. Ulta Salon, Cosmetics & Fragrance Inc., No. 18-cv-2480 (S.D. Cali. February 10, 2020), included claims that Ulta required employees to undergo security checks and other job duties off the clock. Ulta allegedly did not provide non-exempt employees with timely meal or rest breaks as mandated by employment law. Plaintiffs in the case claim unpaid overtime, unpaid minimum wage, failure to provide mandated meal breaks and rest periods, failure to provide employees with timely wages, failure to provide detailed wage statements, and failure to reimburse for business expenses. The federal trial judge signed off on the settlement agreement on February 10, 2020. 

The Settlement Agreement: Tellez et al. v. Ulta 

The settlement agreement proposed to settle the case between Tellez and Ulta Cosmetics will cover 23, 767 class members. The settlement would result in an average estimated payment of $44.38. The most substantial single amount to a class member in the case would total $222.45. 

Other Employers Called to Task for Off-the-Clock Work: 

Ulta Cosmetics is not the only large employer to face legal trouble after allegedly requiring employees to complete “off-the-clock” work. Big Lots Stores agreed to a $7 million settlement in late 2019 to resolve a post-shift waiting time class action lawsuit with a class of 31,500 employees (former and current). Claims made against Big Lots included unpaid, but mandatory security screens when leaving work. Non-exempt employees are entitled to pay for all hours worked under the federal Fair Labor Standards Act (FLSA). Pre-shift and post-shift duties are sometimes considered “work time” by the U.S. Department of Labor and sometimes not. 

Defining What is Compensable According to Employment Law: 

Courts often face the issue of what is compensable and what is not compensable. In 2014, the U.S. Supreme Court concluded that to be considered compensable time, tasks must be “principal activities” that are indispensable and integral to the employee’s job. Earlier this month, the 10th Circuit ruled that a prison officer’s pre-shift and post-shift tasks qualify as compensable. Included in the “tasks” deemed compensable were pre-shift briefings and security screenings. The tasks were deemed eligible under FLSA because they were integral and indispensable parts of the principal activities the officer was hired to perform. 

Employers across the nation have paid millions to resolve similar wage and hour lawsuits. PNC Bank paid a $2.75 million settlement to resolve allegations of employment law violations springing from off-the-clock work. CorePower Yoga settled an off-the-clock lawsuit with a $1.5 million settlement.

If you are required to perform off-the-clock work, or you need to file an employment law lawsuit, we can help. Contact Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in any one of various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago. 

Worker Sues LA Affordable Housing Firm for Overtime Violations

Blaike Wellington, a former LA Affordable Housing employee, filed a lawsuit claiming the nonprofit failed to pay overtime. Wellington also claims she was not the only one that went unpaid.

LA Family Housing Allegedly Failed to Pay Overtime

In the lawsuit filed recently by a former employee, Blaike Wellington, allegations were made that the company failed to pay the plaintiff overtime. Wellington also claimed in the lawsuit documents that there were other “similarly aggrieved employees” that were not paid as required by law. LA Family Housing is one of the area’s most active affordable housing developers. In addition to claims that they failed to pay overtime, they are facing numerous other allegations in the California lawsuit.

LA Family Housing’s Work in the Area: 

LA Family Housing plans to complete an affordable 54-unit development in San Fernando Valley’s North Hills neighborhood. The nonprofit also partners with the Coalition for Responsible Community Development to create a 32 unit, 100% affordable complex in Florence designed to house the homeless and family members. The website indicates that LA Family Housing operated over 400 housing units in the LA area in 2018, moved over 2,200 people into permanent housing situations, and assisted close to 11,000 people as they transitioned out of homelessness and stark poverty.

Wellington Claims Nonprofit Also Failed to Provide Accurate Wage Statements:

In addition to alleged overtime pay violations, Los Angeles Family Housing is facing numerous other claims of employment law violations, including keeping accurate hourly records of timesheets for their workers. Blaike Wellington, the only named plaintiff in the suit, is a former employee and former resident advocate for the nonprofit. Wellington left her place with Los Angeles Family Housing in January. She claims she was not the only employee treated in this manner and that there are other similarly “aggrieved employees” at the LA nonprofit. For instance, employees were left alone at the front desk without assistance and without the ability to leave their workstations for meal breaks or rest periods as mandated by labor law. Wellington’s suit seeks back wages, interest, penalties, and legal fees.

If you need to discuss overtime pay or other employment law violations in the workplace, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in any one of various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.

UPS Employees Allege Employment Law Violations in Recent California Class Action

UPS employees cite various employment law violations in a recent lawsuit. Not the first, but the latest class-action lawsuit filed against UPS Supply Chain Solutions, Inc., this suit claims employees were not paid overtime, did not meet minimum wage requirements, failed to provide legally mandated meal breaks and rest periods, etc. The lawsuit (Case 3:19-CV-07551-RS) is pending in Riverside County Superior Court. The suit was initially filed in the Superior Court of the State of California but was moved to the Northern District of California in November 2019.

California State Labor Law Provides Employees with Protection:

California law requires employers to pay employees for all hours worked, including all the time that a worker is under the “company’s control.” UPS faces allegations that they failed to compensate their workers in a California warehouse for time spent on mandatory security checks.  

Did Mandatory Security Checks Violate Employment Law?

According to claims in the class action, UPS required warehouse employees to complete security checks on their way into the premises and again on their way out. This occurred when they arrived for the shift, as well as when they came and went for lunch or rest breaks. To complete the security checks, workers had to wait in line for their turn to undergo security screenings. Time spent waiting in line, completing the security screening, and walking to and from the screening area to the time clock was not counted as hours worked, so workers were not compensated for any of the time.

Are Workers Under Employer’s Control During Security Checks?

Class members in the suit argue that the time spent going to and from and completing security checks constitute a type of control the employer held over the workers, and the time should, therefore, be compensated. Lawsuit documents argue that the UPS workers are owed minimum wage (and overtime when applicable) for any hours they spend complying with the UPS security check requirements. As the workers were also under the company’s control for part of their lunch breaks and rest periods, the class members argue that UPS did not comply with the law by relieving employees of “all duties” during their legally mandated breaks. Due to time spent completing the mandatory security checks, employees’ meal breaks were shortened to less than the legally required 30-minute meal break and 10 minute rest periods defined by state law. The lawsuit seeks an hour’s worth of pay at the employees’ regular rates of pay for each non-compliant meal break or rest period. 

Is UPS Violating Federal and State Labor Laws?

Seasonal workers on the east coast accused UPS Inc. of federal and state labor law violations in a suit filed in New York federal court. The temporary or seasonal workers, Lalynda Hedges and Zyaire Simmons, worked at New York UPS facilities during the peak season, October 2018 – January 2019. They allege UPS violated labor law by failing to pay them minimum wage, overtime pay, etc.

If you need to discuss employment law violations or if you need to file an overtime or wage and hour lawsuit, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in any one of various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.

Class Action Spotify Lawsuit Alleging Violations of Employment Law

Matthew Elias, of California, filed a class-action lawsuit against Spotify alleging misclassification and failure to provide legally mandated meal breaks and rest periods. Elias filed suit on his behalf and on behalf of others in similar situations who are allegedly “aggrieved.” According to the lawsuit, Elias, a nonexempt employee of Spotify from July 2016 through July 2018, was reportedly misclassified as an independent contractor approximately one year into his tenure.  

Elias Seeks Compensation for Loss of Benefits:

As a result, Elias sought counsel to help him seek compensation for Spotify’s failure to provide him with the same benefits other nonexempt employees receive under FLSA (the Fair Labor Standards Act). Worker protections offered under FLSA include overtime pay requirements (workers must be paid one and half times their hourly rate for hours worked over 40 in one week or 8 in one day), legally mandated meal breaks and rest periods, etc. Elias alleges that the company forced him to use personal funds to purchase cellular data services and streaming services. He claims the expenses were business expenses, and the company should have covered the costs.

Moving the Case From State Court to Federal Court:

Elias filed the lawsuit in the District Court for the Central District of California. Spotify did not immediately make a public comment on the filing, but they did file a request to move the case from state court to federal court since the streaming giant is registered in Delaware. The federal venue will likely be more favorable for Spotify than California state since California passed stringent worker classification laws under AB5 effective January 1, 2020. Legal counsel for Spotify also argued that the case move to a federal courtroom because potential damages could be more than $75,000 (including a minimum of $110,086.40 in allegedly owed overtime wages alone).

California’s Worker Classification Laws Under AB5:

Effective January 1st, California’s AB5 is designed to decrease the abuse of the independent contractor classification by employers. The legislation was inspired to address the massive issue in the ride-share industry, but while Uber and Lyft openly refuse to comply, many other sectors are feeling the effect of change as it ripples across the state. Thousands (or hundreds of thousands, we can’t be sure) of contract workers have been released from work without replacement jobs as many are merely turning to different states or overseas job markets where independent contracting is entirely legal. AB5 currently faces significant backlash from various industries like the trucking industry that are being hard hit by the legislation.

AB5 and California State’s Music Industry:

The new law may be disastrous to the state’s music industry as music productions often involve various hired musicians, assistants, etc. most of which are traditionally hired as independent contractors for the event, performance, gig, etc. While dozens of industries successfully crafted agreements defining needed exemptions to AB5, the RIAA was not able to do so for musicians, labels, and other music industry groups. Some suspect the failure to obtain exemptions for the music industry successfully was likely due to in-fighting amidst musician unions.

If you need to file a misclassification lawsuit or if you need to discuss other employment law violations, don’t hesitate to get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in any one of various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.