Politics in the Workplace: Navigating the Landmines

This year’s heated election cycle and last week’s shootings have left nerves raw. I see evidence of this on Facebook every day as “Friends” express their anger, fear, and criticism in memes, status updates, and comment wars. With the parallel existence of our virtual and real lives, these same sentiments are just under the surface in conversations at work and will undoubtedly bubble to the surface, if not explode, at work. As an employer, how do you maintain a cordial work environment, ensure that your employees feel safe and are productive, and also protect yourself from a lawsuit? To help navigate through the rest of this year, California employers should be mindful of 3 main principles when it comes to politics in the workplace. Beware of forcing your politics on your employees. Yes, at this point there is no question that corporations have the right to free speech. However, California law prohibits employers from “[c]ontrolling or directing, or tending to control or direct the political activities or affiliations of [their] employees.” (Cal. Lab. Code § 1101.) Additionally, Section 1102 of the Labor … Continue reading

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What to Do When a Client Doesn’t Pay

This is the first post in a new series called “What to Do” where I will discuss “what to do” in various common situations that come up in small and medium sized businesses. Feel free to send me your “what to do” question. Today’s topic is what to do when a client doesn’t pay. This is a common problem that businesses big and small face and if you’re in business, you’re selling services or products in exchange with the expectation that you will be paid for those services or products. The cost to your business of unpaid invoices is not just the dollar amount on each invoice but the opportunity cost of the investment you could make in your business from that income. Additionally, it costs your business time and money to collect on unpaid balances. Thus, the cumulative effect of multiples unpaid invoices, even for small outstanding amounts, is detrimental to your business’s viability and growth. Before starting work: For the proactive business here are some tips to help you avoid or minimize the change of having a client … Continue reading

In: California Civil Litigation, Contracts, Starting a Business, Uncategorized, What to Do | Leave a comment

Lease vs License Agreement

If you are opening a brick and mortar store and are about to sign your first lease on a space or if you are moving to a new space, congratulations! Committing to a location for your business for a number of years is a big commitment. Before you put your signature on that document, let’s clarify whether you are holding a lease or a license agreement and what that means. A lease gives exclusive possession in the premises. Regardless of whether the agreement is labeled a “lease” or “license agreement” the test of whether the law considers an agreement to use real estate is a license or a lease is whether the contract gives you exclusive possession of the premises “against all the world, including the owner.” If it does, then you have a lease. If the agreement only gives you the privilege to occupy the premises under the owner, in which case it is a license. An example of this would be, someone who rents a home for a 1 year term, who has the homeowner’s agreement that the … Continue reading

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Overtime Rules for Inside Salesperson Commissions

If your business sells products or services, it is likely that you have at least one inside salesperson who earns commissions on the sales that the inside salesperson makes. If this inside salesperson has the potential to earn a decent amount in commissions, your company may have classified this salesperson as an exempt commissioned employee. This means that you are not paying this person overtime pay for overtime hours worked. If this is the case, you may be incorrectly paying your inside salesperson and exposed to a potential claim for wage theft. Exempt vs Non-Exempt Classification Certain commissioned inside sales employees may be exempt from overtime pay in California if the employee earns more than one-and-a-half times the minimum wage each workweek, and more than half of the employee’s compensation represents commission earnings. (Outside salespeople do not need to meet the minimum salary requirements.) The calculation on the second prong could get complicated where the employee gets a draw on commissions. In addition to the two prongs, in order for an inside salesperson to be exempt from overtime pay, a … Continue reading

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New Overtime Rules Under FLSA Approved – What You Need to Know

The Department of Labor recently approved changes to the overtime rules under the Fair Labor Standards Act (FLSA) that will have a significant impact on California employers and workers. According to the Department of Labor, the new rules will affect over 300,000 California workers who will either be entitled to overtime pay or receive raises to maintain their exempt employee status. Here are some answers to commonly asked questions about the new rules. Who is affected by the new rules? Employees who are exempt from minimum wage and overtime pay protections under the executive, administrative, and professional (EAP) exemption and the highly-compensated employee (HCE) exemption of the FLSA. (Learn about exempt vs non-exempt employees.) The FLSA covers a majority of workers. Details on who is covered by the FLSA are available from the Department of Labor. What are the changes made by the final rule? In addition to meeting the duties test, in order to meet the EAP exemption requirement, the employee must receive a salary of at least $913 per week or $47,476 annually. HCEs must receive $134,004 annually … Continue reading

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New Proposed Overtime Rules – Potential Effects on California Employers

There has been much discussion about the Department of Labor (DOL)’s proposed changes to federal overtime rules under the Fair Labor Standards Act (FLSA). California employers may have mostly ignored the federal overtime rules because California’s rules are more protective of employees and have a higher threshold for overtime exemptions. However, if these rules go into effect, California employers will have to make some adjustments. Failure to properly classify employees as exempt vs non-exempt and follow overtime rules could be costly for employers. What Are the Proposed Changes to Federal Overtime Rules? Under FLSA regulations, an employee is exempt from the right to overtime pay if s/he meets the following 3 requirements: Paid on a salary basis regardless of the number of hours worked; Receives a salary of at lease $455/week or $23,660/year; and Satisfies the duties tests for exempt employees (executive, administration, professional, computer, and outside sales regulations). The DOL proposed increasing the salary threshold from $455 per week to $970 per week ($50,440) annually. The salary threshold for the highly-compensated employee exemption would increase from $100,000 to $122,148 per … Continue reading

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Employee Handbook: Your First Line of Defense

Many business owners, managers (other than human resources professionals), and employees view employee handbooks as pesky hindrances to flexibility and growth.  The contrary is true, and knowing when and how to use your handbook could save your business from hours of lost productivity, low morale, and expensive lawsuits. Solutions to 3 Common Issues Await in Your Handbook  1.  Time Off/Leave Requests Your employee handbook could guide you through the following analysis: Does the employee have a right to time off? You are likely familiar with common requests for leave due to illness,pregnancy, disability, and jury duty.  However, you may not be aware of lesser-known leaves such as those for victims of domestic violenceor for alcohol rehabilitation.  Thus, when the leave request is uncommon, check your employee handbook to confirm whether the employee is entitled to time off. Whether and what type of documentation must the employee provide? Is the time off paid or unpaid? Does the request for time off trigger your duty to engage in the interactive process? Does the request for time off trigger your duty to accommodate? Although … Continue reading

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Independent Contractor Misclassification

A few days ago, Uber agreed to pay up to $100 million to settle class-action lawsuits in California and Massachusetts claiming that its drivers are employees not independent contractors. Paying out $100 million is by no means the end of this story. The settlement does not affect other drivers’ ability to sue on the same grounds nor does it preclude the Labor Commissioner from determining that individual drivers are in fact employees (which it has done in at least one case). The U.S. Department of Labor also recently issued a formal interpretation of the federal Fair Labor Standards Act as it pertains to the classification of independent contractors. This advisory opinion signaled the intention of federal regulators to scrutinize independent contractor classifications and treat most workers as employees. Most companies do not have enough independent contractors to be subject to class action lawsuits worth $100 million, but how will a $1 million lawsuit or even a $100,000 lawsuit affect your business? If your company uses independent contractors, here are some steps you could take to minimize your exposure: Closely examine … Continue reading

In: California Civil Litigation, Contracts, Employment Law | Leave a comment

Breach of Contract in California

Breach of contract is likely the most common claim alleged in civil litigation cases. Contracts are the glue that holds our society together and we all enter into agreements (i.e. contracts) in one form or another on a daily basis. When the breach of that agreement results in injury, many look to the court system for a remedy. Here are a couple of the more memorable recent breach of contract cases include: Bill Cosby filed a breach of contract lawsuit against a woman who accused him of sexual misconduct, her mother, her lawyers, and the publisher of the National Enquirer. The lawsuit claims that they “disclosed information that they promised to keep secret” in return for a financial settlement. Donald Trump sued Jose Andres’s organization for breach of contract after the celebrity chef canceled his plans to open a restaurant in a Trump group building after Donald Trump’s comments on immigration. What is a contract? Simply said, “A contract is an agreement to do or not do a certain thing.” (Cal. Civ. Code § 1549.) The essential elements (parts) of a … Continue reading

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Trial Preparation – Anatomy of a Lawsuit Part VIII

This series applies to California lawsuits only. For rules regarding your state’s civil litigation procedure, visit the website for your specific state’s judicial branch. This is a very broad overview. Multiple considerations must take place and detailed analysis goes into each step. To recap, we’ve discussed some considerations before filing a lawsuit such as What is the Deadline to File a Lawsuit and Where to File a Lawsuit. We’ve also discussed How to File a Lawsuit, Responding to a Lawsuit, Discovery, and Mediation. Here’s a visual representation of what a lawsuit looks like. This article focuses on the phase within the blue circle. Although the above flow chart depicts trial preparation as a distinctive step before trial, in reality, your attorney is preparing for the trial from the minute s/he meets with you for a consultation. Trial considerations such as jury appeal, your credibility and the credibility of other witnesses, and the evidence available will influence whether an attorney accepts the case and what theories to pursue. Once a lawsuit is filed, each stage in the litigation is meant to prepare for trial: i.e., pleadings, motions, … Continue reading

In: Anatomy of a Lawsuit, California Civil Litigation, Hiring a Lawyer | Leave a comment