New California Law: Continued Health Benefits While on Maternity Leave

We continue on our review of the new California laws that go into effect on January 1, 2011.  The bill of the day is SB 299. As of January 1, 2012, employers will be required to continue group health coverage for up to 4 months for female employees who take pregnancy disability leave (maternity leave).  Currently, employers are only required to provide group coverage for up to 12 weeks while employees are on pregnancy leave. The federal Family and Medical Leave Act (“FMLA”) and the California Family Rights Act (“CFRA”) require employers to allow female employees to take up to 4 months of unpaid maternity leave for a “pregnancy-related condition.”  The pregnancy disability leave is in addition to the 12 weeks of “maternity leave” which is allowed for parental bonding. With the new law, employers must continue the healthcare benefits of an employee on leave for pregnancy disability for up to 4 months on the same terms and conditions as before the pregnancy leave.  For example, if the arrangement was for a 50/50 split on the premium, that arrangement must continue … Continue reading

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New California Law: Wage Notice Requirement and Increased Exposure for Employers

AB 469, which is titled the “Wage Theft Prevention Act” is aimed at ensuring the collection on judgments against employers for violations of wage laws. Increased Exposure for Employers Who Violate Wage Statutes 1.  The new law will make it a misdemeanor if an employer willfully violates specified wage statutes or orders, or willfully fails to pay a final court judgment or final order of the Labor Commissioner for wages due. 2.  The new law will extend the time limit for the Division of Labor Standards Enforcement to commence a collection of a statutory penalty or fee against an employer from 1 year to 3 years after the penalty or fee became final. 3.  The new law will extend the time required for an employer who has been convicted of a subsequent wage violation or who has failed to satisfy a judgment to maintain a bond for 2 years (up from 6 months).  The bond is necessary in order for the business to continue operating. New Wage Notice Requirement Additionally, this new law will require an employer to provide each … Continue reading

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New California Law: Employee Credit Report

  The recent deadline for California Governor Jerry Brown to pass or veto the bills on his desk resulted in a long list of new laws passed in California. Like we don’t have enough right? In an effort to share the legal updates without totally overwhelming you, I will try to post one new law a day for the next week or two so check back daily. We’ll start with requesting an employee credit report today. Assembly Bill 22 prohibits an employer or prospective employer, with the exception of certain financial institutions, from obtaining a consumer credit report for employment purposes unless the position of the person for whom the report is sought is: (1) a position in the state Department of Justice, (2) a managerial position, (3) a sworn peace officer or other law enforcement position, (4) a position for which the information contained in the report is required by law to be disclosed or obtained, (5) a position that involves regular access to specified personal information for any purpose other than the routine solicitation and processing of credit card … Continue reading

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Update to Right to Unionize Posting Requirement

The effective date of National Labor Relations Board‘s (NLRB) new requirement that employers post a notice of employees’ right to unionize has been extended to January 31, 2012, instead of the original November 14, 2011 date.  The NLRB states that the postponement was to “allow for enhanced education and outreach to employers, particularly those who operate small and medium sized businesses.” The new requirement has met with much resistance from the business community which fears that the posting requirement will promote unionization among employees.

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Exempt vs Non-Exempt Employee – $17 million Suit for Misclassifying Employees

On September 26, 2011, the California Labor Commissioner filed a $17 million suit against ZipRealty for violations of minimum wage and overtime pay of its real estate agents. The premise for lawsuit is that ZipRealty misclassified its agents as exempt “outside salespersons” when they were in fact non-exempt employees.  The significant fact here is the allegation that the real estate agents spend less than 50% of their time away from the office. If the ZipRealty loses, it would be liable for 4 years of unpaid wages, meal and rest break premiums, unpaid overtime, plus other penalties and interests. Yikes. What is the difference between exempt vs non-exempt employees? We’ll take a look at who qualifies as an exempt outside salesperson. According to Wage Order Nos. 1-2001-16-2001, §2, an outside salesperson is a person age 18 or older who customarily and regularly spends more than half of his or her working time away from the employer’s place of business selling tangible or intangible items or obtaining orders or contracts for products, services, or use of facilities. What the lawyers will spend a … Continue reading

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Disability Accommodation – The Interactive Process

What is the interactive process and why should I care? If you are a disabled employee, you should care because unless your disability is obvious, it is incumbent upon you to initiate the conversation with your employer regarding your limitations and necessary accommodations. As an employer, California law requires you engage in this thing called the “interactive process” with your disabled employees and failure to do so subjects you to liability separate from the failure to reasonably accommodate itself. Now on to the nitty gritty. The law Both the federal Americans with Disabilities Act (ADA) and California’s Fair Employment and Housing Act (FEHA) require employers to engage in a “timely, good faith, interactive process” to determine effective reasonable accommodations with an individual who has a known disability or medical condition and requests accommodation.  However, liability exists only if a reasonable accommodation is in fact possible. Since California generally afford employees more protection than federal law, under California law, an employer’s duty to engage in the interactive process with and reasonably accommodate extends to employees and applicants who do not actually … Continue reading

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Hostile Work Environment – Lessons from Project Runway

Let’s do something fun today. Today’s post will discuss 3 reasons why cliquish work environments cost businesses money using last week’s episode of Project Runway appropriately titled “Can’t We All Get Along” as a practical example. The 3 reasons are: 1. Drop in Productivity – Employees who are excluded from the group at large or not considered part of the “in-crowd” at work generally dread coming to work, are less likely to contribute to the company, and the presence of cliques divides the company into groups that usually don’t work well together. This causes a drop in productivity and the company to miss out on some great ideas that excluded employees may have shared otherwise. 2. Individual stress to employees – The cost here is two pronged: a. Employees who are excluded at work generally suffer from stress-related issues such as headaches, hypertension, and other physical manifestations of stress (real or imagined) that lead them to call in sick. Which circles back to the drop in productivity discussed above. b. Should the cliquish work environment rise to one that is … Continue reading

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Cancer as a Disability – $846,000 Award for Failure to Accommodate Employee During Cancer Recovery

The California Department of Fair Employment and Housing (DFEH) today announced its largest-ever administrative award of $846,300 against electrical supplier Acme Electric Corporation for firing an employee who was recovering from cancer. Charles Richard Wideman worked for Acme Electric as western regional sales manager overseeing sales operations in the company’s largest territory from February 2004 to March 2008.   He developed kidney cancer in 2006 and prostate cancer in 2007, which required two surgeries and numerous cancer-related outpatient appointments. Although the company immediately granted his two requests for time off for  surgery and recuperative leave, they failed to grant his request for further accommodation for the travel limitation his cancers caused from June 2006 through April 2007.  Instead, Mr. Wideman’s supervisor gave him an unfavorable performance evaluation that criticized him for insufficient travel.  On February 28, 2008, Mr. Wideman was fired. After a three-day hearing, the State’s Fair Employment and Housing Commission found Acme Electric violated the FEHA by failing to accommodate Mr. Wideman’s known travel limitation due to his cancers, failing to engage in a good faith interactive process, discriminating … Continue reading

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Genetic Information Now Protected from Discrimination

Last week, California’s Governor Jerry Brown passed SB 559, which amends the Unruh Civil Rights Act and the Fair Employment and Housing Act to include “genetic Information” as an impermissible basis of discrimination. “Genetic information” is defined by the law as any of the following information regarding an individual: (i)  The individual’s genetic tests. (ii)  The genetic tests of family members of the individual. (iii)  The manifestation of a disease or disorder in family members of the individual. (iv) any request for, or receipt of, genetic services, or participation in clinical research that includes genetic services, by an individual or any family member of the individual. However, an individual’s age or sex is not considered “genetic information.”  But we already know that you can’t discriminate on the basis of age or sex. Some of us may ask, who goes around asking employees for their “genetic information” any way?  SB 559’s declarations noted that this form of discrimination was evident in the 1970s, which saw the advent of programs to screen and identify carriers of sickle cell anemia, a disease that afflicts African Americans.  This … Continue reading

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Employee or Independent Contractor? It’s not just a label.

I received an interesting response to my last post on the correlation between the unemployment rate and discrimination charges, which lead me to this blog post. A reader suggested that employers could protect themselves by not having any employees and hiring only independent contractors.  Yes, there are many benefits to hiring independent contractors as long as they are truly that – independent.  However, misclassification of independent contractors when they really are employees is common.  This mistake has costly consequences for employers. Below are 3 costs to employers who misclassify independence contractors: Unpaid taxes.  Should the IRS audit your business and reclassify one or all of your workers as an employee, you now owe the IRS employment taxes, the employer’s share of FICA taxes, and federal unemployment taxes, which were not paid because the misclassified worker was treated as an independent contractor.  Additionally, the employer would be liable for penalties and interest for failure to pay the taxes and failure to file payroll tax returns. Meal and Rest Break Premium Pay.  A worker classified as independent contractor probably did not receive … Continue reading

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