Paying Tips & Tip Pooling in California

Clients in the restaurant and food services industry often ask me about California laws on paying tips. Here are the basics on paying tips in California. General Rules on Paying Tips in California Definition of gratuity – “Gratuity” is defined by the California Labor Code as a tip, gratuity, or money that has been paid or given to or left for an employee by a patron of a business over and above the actual amount due for services rendered or for goods, food, drink, articles sold or served to patrons. It also includes any amount paid directly by a patron to a dancer covered by IWC Wage Order 5 or 10. Rule #1 – Gratuities are the sole property of the employee or employees to whom they are given. Rule #2 – According to California Labor Code Section 351, employers may not share in or keep any portion of a tip or gratuity that a patron left for or gave to one or more employees. Rule #3 – It is illegal for employers to deduct the employee’s wages from the tips, … Continue reading

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New California Law on Equal Pay

The new California law on equal pay between the sexes (SB 358) goes into effect January 1, 2016, and is considered the most aggressive equal pay law in the nation. The new law will create a much stricter standard for gender pay equity. California employers will want to begin preparing immediately for its impact. The Law Requires Equal Pay for Equal Work The new law will amend California’s Equal Pay Act to prohibit an employer from paying employees of one sex lower than employees of the opposite sex for “substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.” Limited Exceptions Available to Employers  If a wage differential exists, employers will escape liability only if they can show that the wage differential is based on: a seniority system; a merit system; a system that measures earnings by quality or quantity of production; or some other bona fide factor other than sex such as education, training, or experience. Should an employer attempt to justify a pay differential under this law as a bona fide … Continue reading

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10 Business Events that Should Trigger a Call to Your Lawyer

As an owner of a small business, I understand the external demands faced by small and medium-sized business owners.  Sometimes we think we can do it all . . . until we realize that we can’t.  At some point, a business owner wonders “when should I contact a lawyer?”  Unfortunately, many businesses wait until a problem that would have cost a few hundred dollars to fix turns into a $10,000 problem before finding a lawyer. Here is a list of when to call a lawyer for a quick consultation. As Desiderius Erasmus said, “prevention is better than cure.”  This is not an exhaustive list and the prevention is not absolute ,but at the very least, it will minimize your potential risks.  1.  Before hiring your first employee The Prevention: Violations of federal and California anti-discrimination laws; Misclassification of exempt and non-exempt employees; Violations of the Fair Credit Reporting Act and California laws on backgrounds checks and consumer reports; and Violations of federal and California employment laws on overtime pay, meal and rest breaks, and pay stub violations. 2.  Before firing an employee … Continue reading

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

Post-Labor Day: Employment Law Blog Carnival

For many of us, Labor Day marks the end of summer – the last hurrah as the kids go back to school – the last day you could wear white (who came up with that rule anyway?). But since this is an Employment Law Blog Carnival, I thought we’d learn a little about the history of Labor Day as we get our monthly employment law update. What is Labor Day? Labor Day, the first Monday in September, was created by the labor movement and is dedicated to the social and economic achievements of American workers. Speaking of the labor movement, Janette Levey Frisch at The EmpLAWyerologist Firm did a great job of breaking down the NLRB’s recent ruling in the post “What Did the NLRB Say in its Ruling on Joint Employment–and Why?”  Donna Ballman at Screw You Guys, I’m Going Home outlines the steps to starting a union in the post “Is It Time to Start a Union at Your Workplace?” The growth of labor organizations brought about increased protections for workers. Jana Grimm’s post at Employment Essentials on “Workplace … Continue reading

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California Paid Sick Leave Law Clarified

The new California paid sick leave law went into effect on July 1, 2015. The law was so confusing that it was clarified with a new bill soon after. Is your policy in compliance? Here are the basics: Who gets leave: Employees who work for an employer for more than 30 days within a year is entitled to paid sick days. Accrual: At least 1 hour for every 30 hours worked. Accrual may be at a different rate if it is accrued regularly and the employee accrues 24 hours or 3 days of leave by the 120th day of work. Employers may cap accrual at 48 hours or 6 days per year. Carry-over: Accrued but unused sick days must carry over into the next year, unless you give the employees 3 days of paid sick leave at the beginning of each year. Use: Employee may start using accrued paid sick days beginning on the 90th day of employment. Employers may limit use to 24 hours or 3 days in each year of employment, calendar year, or 12 month period. Written notice: Employers … Continue reading

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New Law – Request for Disability and Religious Accommodation a Protected Activity

Yesterday (July 16, 2015) Governor Brown signed AB 987 into law, making it an unlawful employment practice for an employer or other covered entity to retaliate or otherwise discriminate against a person for “requesting” an accommodation for physical or mental disability or religious belief or observance, regardless of whether the request was granted. Doing so would constitute disability discrimination and/or religious discrimination. This bill was introduced in response to the Court of Appeal’s decision in Rope v. Auto-Clor System of Washington, Inc. (2013) 220 Cal.App.4th 635, where the court found no authority that a request for accommodation, without more, supports a FEHA retaliation claim).  The new law now provides that legal authority. New Law Makes REQUESTING Disability and Religious Accommodations a Protected Activity   Existing law requires an employer to provide reasonable accommodation of, among other things, a person’s disability and religious beliefs and prohibits discrimination against any person because the person has opposed any practices forbidden under the act or because the person has filed a complaint. This new law takes it a step further and prohibits an employer from retaliating or … Continue reading

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Are Your Employees Using Cell Phones for Business?

Personal Cell Phone Use is a Reimbursable Business Expense in California? Yes. Even if an employee has a unlimited plan? Yup. A California appellate court held in Cochran v. Schwan’s Home Service, Inc. that employers must always reimburse employees when they are using cell phones for business when that use is mandatory. This is true even if the employee has an unlimited cell phone plan and does not incur any additional expenses because of the business usage. Colin Cochran worked as a customer service manager for a food delivery provider. As part of his job, he used his personal cell phone to make business calls but the company did not reimburse him for the use of his phone. Cochran filed a putative class action lawsuit against his employer on behalf of 1,500 customer service managers.   The court of appeal agreed that failure to reimburse the cell phone use, even if the employee did not incur additional expenses, violated Labor Code Section 2802(a). The court did not specify how much an employer must pay an employee for his or her cell phone … Continue reading

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Are Electronic Signatures Valid?

Many have asked “are electronic signatures valid?” The answer is YES. Section 1633.7 of the California Civil Code states that an electronic signature has the same legal effect as a handwritten signature.  The problem is proving who signed that electronic signature in court. Technology has made it so easy to sign our lives away with merely the click of a mouse.  It’s so easy that most of us don’t read the documents nor do we remember if we clicked our agreement.   But what happens when you as an employer wants to use that electronic signature as proof of an agreement?  Are you able to establish in court that this particular employee clicked the mouse that caused the electronic signature to appear?  If your answer is “no” or “probably not” you may have wasted the money you paid an attorney (or Google) to draft that arbitration or confidentiality agreement that a court will not enforce. Just last week, my favorite California Court of Appeal issued an opinion in Ruiz v. Moss Bros. Auto Group, Inc. upholding the trial court’s finding that Moss Bros., … Continue reading

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How to Prevent Sexual Harassment

You’ve probably heard the quote “prevention is cheaper than cure” and the same holds true for sexual harassment claims in the workplace.  If you’re looking ahead and wondering how to prevent sexual harassment, sexual harassment prevention training, is the way to go. If you are a California employer with 50 or more employees, you are subject to a law commonly known as AB1825.  This law mandates sexual harassment training for supervisory employees every two years.   The law was enacted in 2005, which makes 2015 a re-training year.  Even if you are a smaller employer, a modified training program will go a long way to preventing sexual harassment in the workplace. Basic Provisions of California’s AB1825 Two Hours of Sexual Harassment Training Every Two Years The deadline for the first round of AB 1825 training was December 31, 2005. Thereafter, employers must provide two hours of training to each supervisory employee every two years. 50 or More Employees AB1825’s sexual harassment training requirements apply to organizations that regularly employ 50 or more employees. (Independent contractors and temps are included in the … Continue reading

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Paying Employees for On-Call or Standby Time in California

Having employees on-call or on standby allows you to serve your customers 24 hours a day. A great business model if you are paying your employees correctly but could have expensive consequences if you don’t. Failure to properly pay employees could be considered “wage theft” in California. Are you paying employees correctly? In California, an employer is obligated to pay the wages of a non-exempt employee for all time that the employee is under the control of the employer. The predominant factor in determining whether employees are under an employer’s control is their ability to engage in personal activities. The information below applies to your non-exempt employees but whether you are classifying employees correctly is another matter. Let’s assume that you did. Are your employees under your control and entitled to pay? Employees are required to be on-call or on standby at the work site. Yes.  They are under your control and must be paid for that time even if they are just watching Office Space, taking a nap, or on Facebook, waiting for something to happen. Employees are on-call or on … Continue reading

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