Tip Pooling Distribution Restrictions Upheld by Ninth Circuit

Tip pooling is a common practice in the restaurant industry but the legal back and forth of how much and to whom the pooled tips could be distributed has lead to much confusion within the food services industry. Restaurants May Not Require Wait Staff to Share Pooled Tips With Back of House Staff Last month, in the case of Oregon Restaurant and Lodging Association et al. v. Perez et al., the Ninth Circuit upheld the Department of Labor’s rule barring employers from collecting tips given to waiters or other service employees and distributing to back of house staff not in the chain of service (i.e. cooks and dishwashers). Since California is within the Ninth Circuit’s jurisdiction, the Court’s decision in this case will lead to increased litigation against restaurants for unpaid wages.  Highly successful restaurants have closed their doors as a result of these wage and hour claims. PRACTICAL TIP: Enterprises with tip pooling practices should have a written tip pooling policy that specifically outlines how tips are pooled and shared. Such written policies should clearly state that pooled tips will not be … Continue reading

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California Aggressively Fights Wage Theft

Senate Bill (S.B.) 588 that went into effect on January 1, 2016, seeks to ensure recovery of unpaid wages by victims of wage theft. What is Wage Theft? Wage theft is defined as failing to pay workers for all of their work, regardless of whether it is intentional or merely an honest mistake. This includes paying below minimum wage, failing to pay overtime, violating meal and rest break requirements, and failing to pay for off-the-clock work. New Penalties for Wage Theft If an employee brings a successful wage claim against your company, the Labor Commissioner can now place a lien on the company’s property or levy on the business’ bank accounts and/or accounts receivable, including a lien or levy to recover the employee’s attorneys’ fees. SB 588 prevents a company from closing down its business and re-opening under a new name in order to avoid their debts to workers. Owners and anyone else acting “on behalf of” the employer are now individually liable for wage and hour violations. This means that the Labor Commissioner can now seize the personal property and bank accounts … 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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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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Commission Agreement Law in California

Governor Brown signed AB 1396, which requires that as of January 1, 2013, a commission agreement for services to be provided in California must be in writing. The writing must set forth the method by which the commissions are to be computed and paid.  An employer is required to give a signed copy of the contract to the employee and obtain a signed receipt for the contract from the employee. TIP:  Although the AB 1396 does not go into effect until 2013, it is a good practice for employers to enter into a commission-based agreement in writing to ensure that each party clearly understands how commissions will be computed and paid. If you have any questions regarding this or any of the new California laws that were recently passed, feel free to contact us or call 949.529.0007.

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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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