More California Professionals Working from Home in 2020: Deducting for Business Use of a California Residence

As more and more professionals work from home in 2020, California law firms, securities firms, banks, and other intellectual enterprises are carefully considering the application of IRS Code Sections governing deductible expenses related to qualified business uses of a home (Rev. Proc. 2013-13 (IRS RPR), 2013-6 I.R.B. 478, 2013 WL 161197, IRS Code 26 CFR 601.105).

IRS Revenue Procedure Released in 2013 Provided the Optional Safe Harbor Method: 

In 2013, the IRS released Revenue Procedure 26 CFR 601.105, which provided an optional Safe Harbor Method for taxpayers to use when determining the amount of deductible expenses related to the use of their home for qualified business purposes. Many California law firms, securities firms, banks, and other intellectual enterprises can turn to the Safe Harbor Method as an alternative to calculating, allocating, and substantiating actual expenses as required by § 280A of the Internal Revenue Code. The Safe Harbor Method is effective for any taxable year since 2013.

Safe Harbor Method Simplifies Business Use of Home Deductions for California’s Small Business Owners:

The calculation, allocation, and substantiation of any allowable deductions due to using a part of a residence for business purposes can be overly complicated and troublesome for California’s small business owners. The IRS and the Treasury Department are aware of the issue. The safe harbor method attempts to minimize recordkeeping, administrative, and compliance requirements used to determine allowable deductions under § 280A. Under the safe harbor method, California business owners can determine allowable deductions for business use of their residence by multiplying a predetermined rate (currently $5.00) by the amount of square footage dedicated to business use in their home (not to exceed 300 square feet).  

The Safe Harbor Method is an Alternative to Itemized Deductions for Business Use of a Residence:

The safe harbor method is a replacement of calculating actual expenses under § 280A. If a California small business owner elects a safe harbor deduction, they cannot deduct any actual business expenses due to qualified business use of their home in the same taxable year. Taxpayers using the safe harbor method to determine deductions must still comply with requirements outlined in § 280A regarding determining eligibility to claim a deduction.

Reimbursements & Other Expense Allowance Arrangements for Employees Working from Home:

The safe harbor method does not apply to employees working from a home office if they receive allowances, advances, or reimbursements for business expenses connected to the qualified business use of their home. Reimbursement is required under California Labor Code Section 2802, so California employees working from home should be cautious claiming safe harbor deductions if they have any expense allowance or reimbursement arrangement with their employer (as defined by  § 1.62-2).

More California Professionals Working from Home in 2020:

With more professionals working out of their homes for significant portions of 2020, both employees and employers must consider the financial implications.

If you have questions about California labor law and how employment law protects California workers working from home in 2020, Blumenthal Nordrehaug Bhowmik DeBlouw LLP wants to help. 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.

Are Workers Being Penalized for Reporting Covid-19 Safety Violations in the Workplace?

While many California employers and companies throughout the nation take the threat of Covid-19 seriously, and do their best to implement all safety recommendations from government agencies, there are some who dismiss the threat.

When Companies Fail to Comply with Safety Measures Recommended by Government Agencies:

When companies fail to respond to the threat by complying with safety recommendations suggested by government agencies (or complying with mandates from their local, state, or federal government), they put their employees and their customers at risk. However, some employers are doing just that. Employers choosing not to adhere to safety recommendations may refuse to provide necessary masks or other PPE to their employees, they may fail to allow employees to exercise social distancing, they may deny employee requests to work from home, etc.

Ultimatums to Return to Work During the Covid-19 Pandemic:

In some instances, employees that complained to their employer or to their employer’s Human Resources department about the failure to implement safety measures in their workplace met with resistance. In other cases, these employees experienced retaliation or even termination in response to their complaints. Some employees who requested telecommuting due to the dangers presented by the pandemic were told to return to work or resign.

Employees Fired for Refusing to Return to Unsafe Workplaces During Covid-19 File Suit

Many employees fired for refusing to put themselves and their families in danger by returning to unsafe workplaces in the midst of the Covid-19 pandemic are filing suit. Under California’s whistleblower law, and the Conscientious Employee Protection Act, employers are prohibited from firing, demoting, or retaliating against workers in any way due to a worker’s refusal to participate in activities that the employee believes are incompatible with safety mandates or public health.

More Employers Are Asking Employees to Return to Work:

As more employers start to encourage workers to return to the office, the number of employees resisting what they see as unsafe or unhealthy workplace conditions is growing. Employees facing adverse action due to this unprecedented scenario can turn to legal protections in place for whistleblowers. There are currently 23 federal whistleblower statutes in place to protect workers from retaliation if they report workplace safety violations. These statutes are enforced by the Occupational Safety and Health Administration, and the U.S. Department of Labor.

Covid-19 Related Lawsuits Are On the Rise:

Whistleblower complaints filed with the Occupational Safety and Health Administration increased by 30 percent between from February 2020 to May 2020. Almost 40% of the significantly increased complaints  were Covid-19 related - filed in most part by employees who allege they experienced adverse employment action after they reported workplace safety violations. It’s estimated that approximately 170 retaliation/whistleblower suits have been filed across the country; making retaliation/whistleblower lawsuits the 2nd largest category behind remote work/leave lawsuits. And more Covid-19 related suits have been filed claiming wrongful termination.

If you need to discuss workplace retaliation or if you need to file a California wrongful termination 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.

Court Erases Wrongful Termination Verdict, but Defamation Still Costs Allstate $4M

When Michael A. Tilkey pled guilty to disorderly conduct charges, Allstate Insurance Co. fired him from his job as a broker paying $200,000 per year. Tilkey’s resulting wrongful termination suit eventually reached the California appellate court where the court ruled Allstate was within their rights to fire Tilkey. However, this wasn’t the end of the story. 

Allstate’s Decision to Report the Reason for Tilkey’s Termination:

Upon firing Tilkey, Allstate reported that he was terminated due to reasons related to “domestic violence.” While the appellate court found in favor of the carrier in connection to the wrongful termination claims, they found in favor of the plaintiff regarding this announcement of the cause for termination qualifying as defamation. The 4th District Court of Appeal panel found the defamation deserving of an award totaling over $4 million in compensatory and punitive damages.

Jury’s Finding that Tilkey Was Wrongfully Terminated Reversed:

While the $4M defamation award is a stiff penalty, it could have been much worse for Allstate. The San Diego County jury that heard the case originally found in favor of Tilkey - finding that Tilkey was wrongfully terminated and awarding the plaintiff over $18.5M. The appellate court found merit in two of the six grounds Allstate listed in their appeal of the jury verdict, and after finding that Allstate was within their rights to fire Tilkey after he pled guilty to disorderly conduct charges, the appellate court slashed the $18.5M award from the jury significantly.

The Incident that Led to the Wrongful Termination & Defamation Case:

Tilkey was employed with Allstate for 30 years. In August 2014, he went out with his girlfriend and they had some drinks. Afterward, they went home and an argument began. Tilkey decided to leave, walked outside to the enclosed patio to get a cool he brought, and his girlfriend locked the patio door. Tilkey repeatedly banged on the glass patio door insisting she let him in so he could gather his things. The girlfriend responded by calling the police. When officers arrived on the scene, they noted the interior trim of the door frame was broken. When searching Tilkey’s travel bag, they discovered marijuana and a pipe. Tilkey was arrested on multiple charges including “criminal damage deface,” possession, and disorderly conduct/disruptive behavior. According to the opinion of the appellate panel, the “domestic violence” label was attached to the last misdemeanor.

Allstate’s Response to the Charges Against Tilkey:

Tilkey’s Allstate supervisors received emails from Tilkey’s ex-girlfriend that were flagged for review. Human Resources investigated the matter in December 2014, learned that Tilkey was arrested, and took a plea deal leading to the dismissal of two of the charges. HR reported to supervisors that Tilkey’s third charge would be dismissed once he completed a “domestic nonviolence diversion program” and that the incident did not include a violation of any company policies. After another email to the company from Tilkey’s ex-girlfriend, the Human Resources supervisor suggested a change made to the report, altering it to list that Tilkey was arrested on a “domestic violence” charge, and changing the report’s conclusion to state that Allstate had since “lost confidence” in Tilkey. Tilkey was terminated on May 27, 2015. The reason cited for Tilkey’s termination was, “the retention of the domestic violence charges suggests that Tilkey engaged in behavior that was construed as acts of physical harm or violence towards another person.” Allstate submitted a standard form regarding the termination to the Financial Industry Regulatory Authority (FINRA) which acts as a self-regulatory body for licensed insurance brokers. The standard form (Form U5) included the “reason” for Tilkey’s termination. In response, Tilkey filed suit alleging wrongful termination and defamation.

If you need to discuss employment law violations or have questions about how to file a California wrongful termination lawsuit, don't hesitate to 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.

Recent Allegations Point to PAGA Violations at Citibank

In recent news, a PAGE violations lawsuit was filed against Citibank, N.A., alleging the company violated the PAGA (The Private Attorney General Act) when they allegedly failed to properly calculate employee wages.

Citibank Facing PAGA Violation Allegations:

The San Francisco California PAGA lawsuit was filed in San Mateo County Superior Court (Case No. 20-CIV-03650). According to the allegations, the plaintiffs (and other similar situated employees at the company) were frequently not able to take off-duty meal breaks and were not fully relieved of job duties during their meal periods.

California Labor Law: Mandatory Rest Periods and Meal Breaks

According to California labor law, employees who work for more than 5 hours in one shift are entitled to a thirty minute meal break before the end of their 5th hour of work. The thirty minute meal break is legally required to be uninterrupted (the employee must be released from their job duties during their breaks/meal periods).  

What is PAGA and How Does it Work?

The Private Attorney General Act or PAGA is a mechanism in place that enables employees suing under PAGA to do so with the State of California enforces California labor law as the proxy agent of a California labor law enforcement agency. Seeking recovery or civil penalties under PAGA is, in essence, intended to protect the public from illegal practices rather than to benefit the plaintiff/s as a private party or parties. The act of filing a lawsuit under PAGA is essentially a law enforcement action not intended to recover damages or gain restitution for an employment law violation, but to give everyday citizens the power to enforce the Labor Code as if they were deputized as private attorneys general.

Allegations Made in the Citibank PAGA Lawsuit:

Due to the rigorous work schedules of the plaintiffs and similarly situated employees at Citibank, they were periodically denied the mandatory rest breaks and meal periods that California employers are legally required to provide.

If you need to discuss labor law violations in the workplace or if you need to file a PAGA 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.

Gender Pay Discrimination Claims Result in HP and Hewlett Packard Enterprise Paying $1.5M

HP and Hewlett Packard Enterprise are well-known Bay Area tech giants. Together the companies will pay $1.45 million due to “systemic pay discrimination” allegations negatively affecting their female workforce.

The $1.5M Payment from HP & Hewlett Packard:

The $1.5 million is intended to cover back pay for close to 400 female employees of the two tech giants. The affected employees work for operations in California and three other states. The amount paid to the affected employees will also include interest.  

The Terms of the Settlement Resolving Gender Pay Discrimination Claims:

Under the terms of the settlement, HP and Hewlett Packard agreed to investigate compensation policies and actively seek ways to make sure the companies’ employment policies and practices (including record-keeping processes, and internal auditing of company records) comply with employment law. The tech giants are cooperating with the terms of the agreement, which should be good news for their female employees and future female employees.

Tech Giant Denies Gender Pay Discrimination Claims:

Hewlett Packard denied the discrimination allegations, but settled in order to put the entire matter in the past. The company insists that, as a company, they are dedicated to unconditionally including all employees (including pay equity issues) and do not discriminate on any basis, including gender, race, or sexual orientation. Since the tech giant firmly believes their current policies and business practices are strong and effectively provide equal pay for equal work, they believe the charges made in the case are without merit. However, they decided that it was in the best interests of the company and everyone involved to resolve the issue quickly by voluntarily settling with the plaintiffs.

Allegations of Pay Discrimination:

While the company repeatedly claimed that they do  not tolerate discrimination of any kind at their company, or in their business or employment policies or practices, the Labor Department found compensation disparities during routine employment law compliance checks. These disparities seemed to clearly indicate a disparity in compensation between Hewlett Packard’s male and female workers performing similar job duties in similar positions at the company.

If you need to discuss how to file a California gender pay discrimination lawsuit or if you have questions about identifying California Labor Law violations, 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.

Are Whistleblower Retaliation Lawsuits More Expensive in California?

California Governor Gavin Newsom signed Assembly Bill 1947 into law in September 2020 with an effective date of January 1, 2021. AB 1947 authorizes courts to award attorneys’ fees to whistleblowers who prevail in their case, making it more accessible for employees with retaliation claims to file against California employers. 

California’s Current Whistleblower Protections:

California Labor Code 1102.5 protects employees from retaliation for disclosing violations of the law, or offering testimony, information, etc. regarding a violation. Retaliation has been recognized in many forms including almost any adverse employment action that could affect the terms of employment or conditions of employment. However, it does not usually recognize personnel decisions like internal transfers as an “adverse employment action” that can be defined as retaliation.

Under the Current Law, Whistleblowers Can Seek Remedies Including:

Current legal protections for whistleblowers in California do include potentially significant consequences for employers that violate the law including back pay and benefits, payment of the employee’s actual damages, and/or civil penalties ($10,000 per violation). Under the current law, whistleblowers are not entitled to receive attorneys’ fees after winning their case under Section 1102.5. (Although some plaintiffs have successfully sought their attorneys’ fees under different statutes).

As Of January 1, 2021, Labor Code Section 1102.5 Will Authorize Award of Attorneys’ Fees:

When AB1947 goes into effect on January 1, 2021, courts will be authorized to award “reasonable” attorneys’ fees to plaintiffs who bring a successful action for a violation under Section 1102.5. The new legislation means California whistleblowers no longer need to seek an award of attorneys’ fees under different statutes or theories. As a result, California can expect to see an increase in the number of retaliation claims.

Supporters of the legislative changes argued that workplace anti-retaliation claims are the foundation for all other employee rights in the workplace (i.e., overtime pay, minimum wage, meal periods and rest breaks, workplace safety, protection from discrimination and harassment, etc.) If employees have a rational fear of termination for seeking their basic rights in the workplace, any “protection” for those rights is severely undermined. AB1947 is a protection for the “foundation” of employee rights in the workplace while also making it more financially accessible for litigants to obtain counsel to take a whistleblower retaliation case to court.

If you have questions about how to identify California labor law violations or if you need to file an employment law claim, 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.

Uber Facing San Francisco Discrimination Class Action Suit

A recent class action lawsuit filed in San Francisco claims Uber ratings posted by racially biased customers resulted in wrongful terminations.

Former Uber Drivers File Class Action Lawsuit in San Francisco Court:

A group of former Uber ride-share drivers filed a class action lawsuit in San Francisco, California court including allegations that the company uses an evaluation system that is heavily influenced by racial and ethnic biases of riders/customers. According to the lawsuit, riders decide to cancel scheduled rides or provide lower ratings/scores based on the race or ethnicity of their driver.

The Uber Rating/Scoring System:

Since a lower score or rating affects a drivers employment and can, in fact, be a significant factor in the driver’s termination from their job, drivers can allegedly be fired because of their race or ethnicity. Plaintiffs claim that Uber has done nothing to correct this glaring issue tying lower scores and more firings due to rider race biases. In response, the plaintiffs turned to the court with a class action lawsuit claiming that firing a worker based on customer or rider ratings is illegal discrimination.

The Plaintiffs in the Case:

Thomas Liu of San Diego is the lead plaintiff in the case. Liu was deactivated as an Uber driver after his score fell below 4.6 (Uber’s minimum rating or standard). Liu is an Asian-American and claims that he experienced hostile behavior from riders due to his accent. Liu claims those hostile passengers gave him low ratings that affected his overall score and eventually endangered his job due to Uber’s standard rating requirements.

Racial Bias a Factor in Uber Transactions Like Tipping:

Many Uber drivers and the massive ride-share company itself, have made note of the racial bias that plays a part in certain aspects of the Uber transaction. One obvious aspect of the overall experience that can be affected is tipping. Overall ratings can also be affected, but they can also be challenged. This is especially true when user comments are being considered.

The class action lawsuit is expected to be heard soon in court.

If you need help with a workplace discrimination claim or other California Labor Code violation, get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP today. 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.