LABOR & EMPLOYMENT ROUNDTABLE 2016...2016/01/25 · 11 20_sfvbj_labor_employment_roundtable.qxp...

January 25, 2016 • An Advertising Supplement to the San Fernando Valley Business Journal

LABOR &EMPLOYMENTROUNDTABLE 2016What Owners and Executives Need to Know

SUE M. BENDAVID

Chair, Employment

Practice Group

Lewitt Hackman

JONATHAN FRASER LIGHT

Managing Attorney LightGabler

NICOLE G. MINKOW

Senior Employment

Counsel

Pearlman, Borska &

Wax

CARRIE NEBENS

President

Equis Staffing

BALLARD ROSENBERGGOLPER & SAVITT, LLP

The San Fernando Valley Business Journal has once againturned to some of the leading employment attorneys andexperts in the region to get their assessments regardingthe current state of labor legislation, the new rules of

hiring and firing, and the various trends that they have beenobserving, and in some cases, driving. Below is a series of questions the Business Journal posed to these experts and theunique responses they provided – offering a glimpse into the stateof business employment in 2016 – from the perspectives of those inthe trenches of our region today.

➼

RICHARD S.

ROSENBERG

Founding Partner

Ballard Rosenberg

Golper & Savitt, LLP

11 20_sfvbj_labor_employment_roundtable.qxp 1/20/2016 7:25 PM 1

12 AN ADVERTISING SUPPLEMENT TO THE SAN FERNANDO VALLEY BUSINESS JOURNAL JANUARY 25, 2016

➼14

LABOR & EMPLOYMENT ROUNDTABLE

◆ What are the most significant newemployment laws taking effect in 2016?

MINKOW: While the legislature was pretty quietlast year, there are a few significant changes for2016. Here are my “top five.” First, the amend-ment to the Equal Pay Act makes it easier foremployees to challenge pay disparities based ongender. As a result, employers must make an extraeffort to properly document all pay differencesand the legitimate reasons for those differences.Second, the minimum wage has increased to$10.00 an hour. This requires employers to,among other things, reexamine their exemptemployees’ wages to ensure it meets or exceedsthe minimum salary requirement. Third, the FairEmployment and Housing Act was modified toprotect employees from retaliation who simply“request” accommodations for disabilities or reli-gious beliefs. Fourth, the California Labor Codealso protects employees from retaliation who arerelated to an employee who has engaged in cer-tain protected activities. Fifth, there have beensome changes to the way employees who receivewages on a piece rate basis must be paid. Ofcourse this is only a summary of some of thechanges and employers should consult with theirlegal team to analyze how policies should beamended and to implement practices to remainin compliance.

ROSENBERG: My top four: (1) California employ-ers now face fines of up to $10,000 if they usethe federal E-Verify system to check the employ-ment authorization status of existing employeesor applicants who have not yet received an offerof employment; (2) California’s Family-SchoolPartnership Act (requiring 40 hours of job pro-tected time off for parents each year) was greatlyexpanded; (3) California’s Equal Pay Act requir-ing pay equity for men and women who do thesame job in the same location now also requirespay equity for jobs that are “substantially equal”(whatever that means) and now affords job pro-tection for employees that inquire about theirco-workers’ pay; and (4) new and more onerouspay obligations for the many thousands ofemployers that utilize a piece rate pay system.

BENDAVID:Wage and hour laws continue todominate the legislature’s attention. The newlaws expose employers who are not in compli-ance to even more liability. California’s mini-mum wage is now $10/hour. This impacts non-exempt employees, as well as certain salariedexempt and inside salespersons. The City of LosAngeles also established its own minimum wageand corresponding notice, recordkeeping andpenalties for noncompliance. Assembly Bill 1513adds new rules for employers who pay by piecerate. These complicated calculation rules willcreate headaches for payroll personnel. Further,the state passed the California Fair Pay Act,which is expected to result in claims by employ-ees who feel they are not paid the same as theirfemale/male counterparts. This law eliminatesthe requirement that the pay difference be“within the same establishment” and eliminatesuse of the terms “equal work” for “equal skill,effort and responsibility.”

NEBENS: California now has one of the strongestequal pay laws in the USA: California Fair PayAct SB 538. There is a bigger burden on theemployer for sex discrimination. This law broad-

ens current laws by prohibiting employers frompaying employees of the opposite sex differentlyfor jobs that are in a similar light, even ifemployee titles are different or they work at dif-ferent locations. For example, a female maidthat cleans hotel rooms should be paid the sameas a male janitor that cleans the same hotel’spublic areas.

◆ Which of California’s new employmentlaws are most likely to land employers incourt?

NEBENS: The new minimum wage rate changeaffects the classification of employees as exemptor nonexempt. To qualify for an overtimeexemption, in addition to all the other legalrequirements, an employee must earn a mini-mum monthly salary no less than two timesCalifornia’s minimum wage for full-timeemployees. In the case of computer softwareprofessionals, in order to be considered exempt,these employees must be paid a minimum of$41.85 an hour or $87,185 salary, among otherthings. A computer software professional notearning that amount would be subject to timeand a half.

ROSENBERG:Without a doubt, the changes toour pay equity law are most likely to landemployers in court. It’s rife with ambiguity andemployer gotchas. While no one can rationallyargue against “equal pay for equal work,” thenew law expands who can sue by also requiringthe same pay if the work is “substantially simi-lar,” allowing employee suing for gender-basedpay discrimination to compare themselves withemployees holding different job titles and withdifferent responsibilities who are working in dif-ferent locations of the company. Job one forevery employer should be to proactively exam-ine pay practices for gender inequities in “sub-stantially similar” positions and evaluatewhether those differences can be legally justi-fied.

BENDAVID: Apart from the myriad wage andhour rules that are resulting in an ever-increas-ing number of claims, California’s Fair Pay Acthas the potential to create legal havoc foremployers for years to come. We all understoodthe concept of “equal pay for equal work,” butthat concept is now outdated. Senate Bill 358requires equal pay for “substantially similar”work, covers employees at different locations ofthe same company, mandates justifications incompensation differences for males and femalesand makes it illegal to prohibit employees fromdiscussing wages. Employers should conductwage audits (under the attorney client privilege)and ensure employee pay is based on factorsother than gender (e.g., on factors like merit,seniority, education or productivity).

◆ What can employers expect from theCalifornia legislature this year?

ROSENBERG: Vigorous enforcement of labor lawscofflaws and even more job protections. Theprevailing view in Sacramento is that too manyworkers still aren’t able to enjoy the benefits ofthe state’s labor regulations. One the biggest rea-sons is the misclassification of workers as inde-

pendent contractors. According to the law, mostworkers are employees and independent con-tractor status is the rare exception. Employerswho misclassify workers as contractors face stifffines and compliance lawsuits. In addition, com-petitors who shoulder the full economic burdenof employment compliance are suing those whodon’t in an effort to level the playing field. And,unions seeking to expand their ranks are doingthe same.

MINKOW: There has been a significant amount ofdiscussion regarding legislation regarding work-place bullying and additional paid leave foremployees beyond what California already pro-vides, such as for baby bonding. Many lawmak-ers have made efforts to introduce laws in thisregard, to no avail. We also expect to receiveadditional guidance and clarification regardingclassification of employees and independentcontractors. Also, another effort to increase min-imum wage is likely. Finally, there may be someefforts to bar mandatory employment arbitra-tion agreements. It will certainly be an interest-ing year.

◆ How can employers remain current onthe ever-evolving employment law trends?

MINKOW: Depending on the size of the organiza-tion, employers can remain current in many waysbut continuing education is simply the key. Thereare many training and education opportunitiesavailable to human resource professionals andcompany executives. In fact, local law firms andhuman resource organizations invest a significantamount of time and money in providing semi-nars and training regarding employment lawcompliance. The focus of these seminars is alwayslitigation prevention. By attending regular train-ing sessions, employers and management canlearn best practices in handling a variety of issuesthat could lead to litigation if handled poorly.We find that most employers intend to complywith the law and mistakes are made simply whenthe decision makers are unaware of the applicableregulation or requirement, or they are relying onan outdated personnel manual without any guid-ance from counsel. Indeed, many of these semi-nars are free for employers.

NEBENS: A great way for employers to stay ontop of trends and regulations is to partner with aprofessional services team. A shameless plug, butat Equis Staffing we are well versed in complyingwith employment laws and many employershire us to help them navigate new regulations.An employer can also seek out an experiencedattorney or human resources consultant to helpthem through dicey waters. Surrounding your-self with good staff is the first step to beingahead of the law and ensuring that you’re han-dling your business by the books.

◆ How important is sensitivity training inthe workplace – and should it be somethingfor management or for all employees?

BENDAVID: According to the EEOC, retaliationlitigation is on the rise. Additionally, we antici-pate more discrimination and harassment claimsstemming from the recent shootings in Parisand San Bernardino, and political comments

‘The amendment to the Equal Pay Act makes it easierfor employees to challenge pay disparities based ongender. As a result, employers must make an extraeffort to properly document all pay differences andthe legitimate reasons for those differences.’NICOLE G. MINKOW

‘According to the law, most workers are employees and independent contractor status isthe rare exception. Employers who misclassifyworkers as contractors face stiff fines and compliance lawsuits.’RICHARD S. ROSENBERG

11 20_sfvbj_labor_employment_roundtable.qxp 1/20/2016 7:25 PM Page 12

January 25, 2016 an advertising supplement to the san fernando valley Business Journal 13

13-36_sfvbj_fullpages_01_25_16.i13 13 1/20/2016 4:17:01 PM


➼16


about those of the Muslim faith. We also antici-pate increased focus on transgender employeeseither by those who are transitioning or self-identifying with a gender opposite the one theywere born with. Generational clashes betweenBoomers, Gen-Xers and Millennials also compli-cate how employers handle employee disputes.It’s the employer’s responsibility to provide asafe work environment. Now more than everemployers need to be proactive and providemanagement training to ensure employees arenot mistreated and so that employees under-stand they must act respectfully to others, evenif they are different from themselves.

ROSENBERG: In my opinion, it’s vital for anybusiness seriously interested in lawsuit avoid-ance and morale building, and should be donethroughout the organization. Experience showsthat a great many employee lawsuits begin withemployees believing that management supports(or at least tolerates) behavior they view as dis-criminatory or hostile towards them on accountof a legally protected characteristic such as theirrace, gender, religion, sexual orientation orancestry, to name a few. Letting everyone knowexactly where the company stands on theseissues and then proactively managing com-plaints whenever they arise is the most effectiveinsurance policy to keep the company out ofcourt.

◆ How has the sexual harassment train-ing mandate worked in your experience,and how will it change with the newrequirement to include the topics of abuseand bullying?

LIGHT: I’ve conducted hundreds of these train-ings and overall I think they help, but it’s notthe end-all. Regular follow-up by managementand, most importantly, leading by example,reinforces the points raised in the trainings.We’ve been including a bullying component foryears because it clearly affects relationships inthe workplace and often such conduct is basedon a protected category such as sex/gender. Sothere shouldn’t be much change in the overallmessage because, whether it’s harassment orbullying, it’s all based on the concept thatsomeone is abusing their power in the work-place.

ROSENBERG: It’s hard to accurately measure theeffect. Like so many HR issues, success in thisendeavor is measured by the absence of some-thing bad happening. I can tell you this. I havetrained thousands of managers and the aware-ness level is much higher in 2016 than evenjust five years ago. So, to the extent that theseeducated managers change their behavior, thenI have to think that the law is doing exactlywhat the lawmakers intended in terms of pro-viding a greater percentage of the State’s work-ers with a harassment free work environment. Isuspect that the exact same thing will happenwith workplace bullying now that this impor-tant subject is part of the training dialog forlarger companies (50+ employees). This is terri-bly important because numerous studies haveshown that abusive work environments canhave serious effects on targeted employees anddrive up workers compensation and othercosts.

MINKOW: The new training mandate regardingabusive conduct has not significantly impacted orchanged an employer’s obligations to providemandatory sexual harassment training to super-visors every two years. We have found that mosttraining providers have modified their programsto include information regarding abusive con-duct and the definitions set forth in the statute.However, employers should certainly ask thequestion to ensure their training provider’s mate-rials are current with the new mandate.

◆ How can employers (especially thosewith smaller companies and facilities)meet the needs of, or accommodate, agrowing transgender workforce?

ROSENBERG: It starts with education about whatis a very complex and emotionally charged topic.And, dialogue with employees in that communi-ty to understand their needs and concerns. Thisreminds me of the discussions when the AIDSepidemic first hit and most employers didn’thave a clue how they were supposed to handlethe matter. Many acted out of fear and igno-rance. The LBGT community, and the transgen-der community in particular, has seen a tremen-dous boost in awareness with the media atten-tion given to the subject in the past two years.Employers are going to have to proactivelyengage this issue as they would any other diversi-ty matter. The most immediate issues are likelyto be co-worker harassment and facilities usage.

BENDAVID: The FEHA protects employees fromdiscrimination based on, among other things,sex, gender, gender identity and gender expres-sion. Accommodating transgender employeescreates a new challenge for employers.Transgender employees are expected to be treat-ed according to the gender s/he identifies with;not the one s/he is born with. This creates con-flict when non-transgender workers don’t wantto share a locker room or restroom with cowork-ers who are contemplating transition, in theprocess of transitioning or have already complet-ed sex reassignment surgery. Employers areexpected to make “reasonable” accommoda-tions. If converting a bathroom into a “unisex”bathroom is achievable, the employer shouldtake that action. Employers should maintain anongoing dialogue with the individual to ensurethe employee’s reasonable needs are met, pro-vided they will not result in undue hardship.

◆ Would you say that a company’semployee handbook is still vital in thisday and age or have they become a thingof the past?

MINKOW: At this point, the employee handbookis here to stay, whether it is in paper form or elec-tronic form. It is vital for employers to make surepolicies and procedures are in place and distrib-uted to employees. In fact, when we defend litiga-tion, the first place we look is to the handbook asit sets the foundation for the company’s practices.Moreover, maintenance of certain policies is alegal requirement so keeping everything in ahandbook is an easy way to remain compliant.

NEBENS: There is no downside to maintainingan employee handbook. In fact, keeping your

handbook and policies current can be a greatway to stay up-to-date on new and upcomingstate and federal requirements. You learn as yourevise, and a good handbook ensures there areno “gray areas” for employees. Employersshould also feel free to ditch their old hand-books and upgrade to a digital version thatemployees can access from their computers andsmartphones. Employees will be more likely totake advantage of an interactive or searchabledigital handbook that they can pull up at theirconvenience rather than a clunky binder thatgathers dust in a desk drawer.

BENDAVID: Handbooks are even more importanttoday than ever before. In almost every lawsuitwe defend, we rely on a company’s policies inan effort to demonstrate compliance with thelaw. The handbook is a tool employers can useto help defeat employee claims for missed mealand rest breaks, harassment, discrimination, etc.If a policy expressly informs employees of thecompany’s expectations, and if the employeefailed to meet those expectations, the handbookviolation can be used to justify a firing in theface of a wrongful termination claim. Apart fromthe benefit of having all the rules and regula-tions in a centralized spot, handbooks are agood tool to help employers learn and under-stand the laws that apply to them. These shouldbe spelled out, in policy format, in the compa-ny’s handbook which should be regularly updat-ed as laws change.

◆ In light of recent events in SanBernardino and a Planned Parenthoodclinic in Colorado, what can employers doto keep their employees safer?

BENDAVID: Violence in the workplace can origi-nate from many sources, including employees;outside assailants with political grudges; rob-beries; and abusive friends, relatives or acquain-tances of employees. Employers should reviewand maintain their security measures. If thereare concerns about a disgruntled terminatedemployee, the employer should take steps toprotect its people by changing locks, incorporat-ing key coded locks, updating video tech andalarm systems, and the like. Keep front officepersonnel trained on policies of visitors beingpermitted to enter into the work area. Employersshould consider LEGAL background checks(there are significant laws on this topic). If thereis a potentially violent situation, the employercan seek a temporary restraining order, considerengaging security guards and notify the legalauthorities (police) so they are put on notice.Also, train management to recognize and stopharassment, bullying and discrimination.

ROSENBERG: Every employer ought to consideradopting a formal workplace violence preven-tion plan containing 5 key components: (1) aworkplace violence policy; (2) crisis manage-ment team; (3) supervisor training; (4) cus-tomer/client/vendor compliance; and (5) an“Active Violence” plan. Sadly, after virtuallyevery one of these unfortunate incidents,employees come forward to say that they sawsomething, but didn’t put the pieces together. Acoordinated approach can save lives. Consultwith your labor attorney about finding theresources to develop your program.

‘In almost every lawsuit we defend, we rely on a company’spolicies in an effort to demonstrate compliance with thelaw. The handbook is a tool employers can use to helpdefeat employee claims for missed meal and rest breaks,harassment, discrimination, etc. ’SUE M. BENDAVID

‘There is no downside to maintaining anemployee handbook. In fact, keeping yourhandbook and policies current can be agreat way to stay up-to-date on new andupcoming state and federal requirements.’CARRIE NEBENS


◆ What accommodations must an employ-er offer to employees who are parents ofschool age children if there is a schoolclosure due to a terrorist threat?

NEBENS: The Family School Partnership Act SB579 was amended to expand the reasons why anemployee can leave to attend to a child inschool. The law now includes leave for schooland childcare provider emergencies, includingclosures, natural disasters, behavioral/disciplineproblems, and requests that the child be pickedup from school. It also includes leave for find-ing, enrolling, or reenrolling a child in school orwith a licensed childcare provider. The law nowbetter coordinates with California’s paid sickleave law. Employers are now prohibited fromdischarging or discriminating against employeesfor taking off up to 40 hours per year to engagein these child-related activities.

MINKOW: Effective January 1, 2016, Labor Code230.8 was modified to require employers to pro-vide unpaid protected time off to address a “childcare provider or school emergency.” This meanswhen the child cannot remain in school or witha child care provider due to: the school or childcare provider requesting the child be picked up,behavioral or discipline problems; unexpectedclosure; or natural disaster. An unpaid leave for a“school emergency” requires an employer pro-vide more than the 8 hour a month maximum aspreviously set forth in the statute.

ROSENBERG: If the recent LAUSD school closurehad occurred after January 1st, the amendmentsto California’s Family-School Partnership Actwould have required employers to allowemployees leave work to pick up their kids ornot come in at all that day if they had to carefor their kids. In recognition of the exigencies ofparenting, the new law added an emergency leaveprovision requiring employers to allow parentstime off to address child care provider or schoolemergency” situations such as whenever anemployee’s child cannot remain in a school orwith a child care provider because the school orchild care provider has requested that the childbe picked up. In such cases, usage rules (max 8hours a month) don’t apply, allowing theemployee to use as many of the 40 hours peryear granted by law for these purposes. Thesame is true with the law’s advance noticerequirement due to the unplanned nature of theevent.

◆ What is the impact of the NLRB’sBrowning-Ferris decision (Case No.32–RC–109684), and what is going tochange with the advent of this new joint-employer standard?

NEBENS: The decision states that two or morecompanies are considered “joint employers” ofan employee if they share the ability to controlthe employee’s terms and conditions of employ-ment, such as salary and working conditions.Previously, to be considered an employer, it wasrequired for the company to exercise their powerover a worker to be considered one of the work-er’s employers. Now, even if a company does notchoose to exercise their power, they can still beheld liable for the negative impact of other jointemployers since they ultimately still have con-trol over the employee. Joint employment can

cut both ways and both members should have asimilar company culture. No company is abovethe law, so employers need to be confident theirjoint employment is with a co-employer thatmeets all state and federal requirements.

◆ How will the Browning-Ferris decisionaffect staffing agencies?

NEBENS: Many staffing agencies will need tostep up. People expect that staffing agencies aregoing to do the right thing, as compliance willbe monitored at a higher level. Staffing agenciesneed to confirm that their employees are pro-tected and ensure they are in compliance withall state and federal regulations, including theACA. Employers in California also need toadhere to the Healthy Workplaces, HealthyFamilies Act of 2014 that entitles employees topaid sick leave after working in California for 30or more days within a year.

LIGHT: Staffing agencies were already in thejoint employer category in most instances, sothat decision shouldn’t have a large impact onthem. It’s their clients who now will have atougher time claiming that they aren’t a jointemployer; they no longer can successfully pointto the staffing agency as the sole employer. Theclient (“host”) employer in fact controls thework environment as far as harassment situa-tions, decisions on termination, work schedules,and adherence to meal and rest break rules, so itlogically follows that the host employer wouldget tagged as a joint employer in most situa-tions. That’s already been occurring so this newdecision won’t greatly impact these relation-ships. The same holds true for PEOs or employ-ee leasing companies. They clearly are jointemployers.

◆ With the NLRB continuing to prosecuteemployers who have employees signmandatory arbitration agreements, whatshould an employer do?

ROSENBERG: This is a huge problem and there isno good answer. We have a federal agency (theNLRB) pushing its own enforcement agenda inthe face of federal court decisions saying theyare dead wrong. So, employers with mandatoryarbitration agreements have two Faustian choic-es: either abandon the practice altogether eventhough several federal courts have OK’d it orkeep the policy until the U.S. Supreme Courtweighs in on the subject and risk an NLRB pros-ecution. While this seems terribly unfair, theNational Labor Relations Act permits the NLRBto push on with prosecuting employers until theU.S. Supreme Court says otherwise.

LIGHT: Employers should get signed arbitrationagreements. The federal case law in favor of arbi-tration is contrary to the NLRB’s position inmany cases and the NLRB is not the last wordon the subject.

◆ What should employers know aboutemployee arbitration and PAGA?

MINKOW: Currently, employment arbitrationagreements containing a class action waiver arestill viable and recommended in California, espe-

cially with the continued increase in wage andhour litigation. However, both the CaliforniaSupreme Court and federal appellate courts haveruled that claims under the Private AttorneyGeneral’s Act (“PAGA”) cannot be forced intoarbitration. Employers should ensure that theirarbitration agreements exclude PAGA claimsfrom any class action waiver currently in place.While this may lead to the problem of employerspotentially having to litigate an employee’sclaims both in arbitration and civil courts, arbi-tration agreements with class action waivers aregenerally preferred.

BENDAVID: Under the Private Attorneys GeneralAct (PAGA), employees may file a lawsuit againsttheir employers, while acting as “deputies” forthe State of California. They can seek penaltiesfor labor code violations, 75% of which goes tothe State, 25% to the employees (who can alsoseek attorneys’ fees). The California SupremeCourt’s 2014 ruling in Iskanian v. CLSTransportation Los Angeles LLC determined thatarbitration agreements with mandatory classaction waivers are generally enforceable except inPAGA claims. Last September, in Sakkab v.Luxottica Retail North America (more commonlyknown as LensCrafters) the Ninth Circuit decid-ed that the Federal Arbitration Act (FAA) doesnot preempt the Iskanian Rule. Thus, PAGAclaims can and will continue to be asserted incourts. We have seen a rise in PAGA claims andin view of the recent cases, we expect this tocontinue.

LIGHT: It’s pretty simple. Have employees signarbitration agreements that prevent them fromparticipating in class action lawsuits. Thoseclauses are still enforceable and federal law keepspushing back on California’s efforts to eliminatethem. Employees can still bring and be part ofPAGA claims, but the one-year statute of limita-tion under PAGA is far better than up to fouryears in class action. Make sure that the arbitra-tion agreement is enforceable and is issuedPRIOR to the employee beginning work.Existing employees can’t be forced to sign anagreement, but consider incentivizing themwith a day of vacation or PTO. Almost all willsign.

◆ When should employers make accom-modations?

BENDAVID: Employers are obligated to provide“reasonable accommodations” in a variety ofcontexts. This can occur when an employee isdisabled, pregnant, or has a religious dress orpractice that needs accommodating. Anothertype of accommodation is providing a privateroom for employees who need to pump breastmilk at work. Employers should conduct “inter-active dialogues” with employees when these sit-uations arise, to discuss what accommodationsthe employees are seeking, whether thoseaccommodations are reasonable and whetherthe accommodations can be provided or willresult in undue hardship for the employer.Reasonable accommodations that do not resultin undue hardship to the employer (whichdefense carries a high burden of proof) shouldbe made to avoid discrimination claims. Theserules come into play under the Americans withDisabilities Act, the Fair Employment andHousing Act (FEHA), Title VII of the Civil RightsAct of 1964, the Pregnancy Disability rules andothers. Some of these can apply to not onlyemployees, but others as well (e.g., a job appli-cant may need an accommodation in order tofill out the job application form). It has longbeen the rule that applicants must be providedan equal opportunity to participate in the appli-cation process.


➼18


‘Have employees sign arbitration agreements that preventthem from participating in class action lawsuits. Thoseclauses are still enforceable and federal law keeps pushingback on California’s efforts to eliminate them.’JONATHAN FRASER LIGHT



www.pbw-law.com

Specializing in employment law, workers’ compensation defense, subrogation, liability defense and labor-related matters. Meet Barry Pearlman, Founding Partner and Nicole Minkow, Chair of the firm’s Employment Law Department.

Our expertise includes the following areas:

• Alternative Dispute Resolution

• Breach of Contract

• Class Action Defense

• Defense of Labor Code Section 132a

• Defense of Serious and Willful Misconduct

• Discrimination

• Employee Privacy

• Family and Medical Leaves

• Leave of Absence Management

Barry Pearlman, Founding Partner

Nicole Minkow, Chair, Employment Law Department

Pearlman, Borska & WaxDefending California

Employers for 30 Years

Encino(818) 501-4343

Glendale(818) 245-4285

Orange(714) 221-1700

Oxnard(805) 604-1134

South Bay(310) 856-4729

San Diego(858) 875-5500

• Management Training

• Reductions in Force

• Sexual Harassment

• Unfair Business Practices

• Wage and Hour Compliance

• Whistleblower Actions

• Workplace Investigations

• Workplace Violence

• Wrongful Termination



➼20


◆ What are the implications of SB 358,the California Fair Pay Act, which pro-hibits an employer from paying anemployee at a wage rate less than thatpaid to employees of the opposite sex fordoing substantially similar work?

ROSENBERG: The new law places the burdensquarely on the backs of employers to provethat a wage difference between substantiallysimilar jobs is not due to gender. The only wayto legally justify a wage differential is to prove itis based upon a seniority or merit system, a sys-tem which measures earnings by quantity orquality of production or a “bona fide factorother than sex, such as education, training orexperience.” Employers need to know that adeep dive will be made into any employer claimthat the wage difference is justified by “the mar-ket” or linked to the prior earnings history ofthe comparators because the legislature believedthat the market may be inherently biased.Among the very common sense questionsemployers are asking: (1) How can I be sure thatdifferent jobs (at different locations) won’t bedeemed “substantially similar” enough torequire equal pay? (2) Can a company still safe-ly peg pay to the market or what a new hire wasearning in a previous position? And; (3) whatdoes it take for an employer to justify a pay dif-ference under the guise of it being “job related”and “consistent with business necessity?” Thelegal framework is fraught with ambiguity and averitable tsunami of new equal pay litigation islikely.

LIGHT: Until the regulations are firmly estab-lished, we don’t know the impact. If I have athree- year female lawyer performing essentiallythe same work as a five-year male lawyer, do Ihave to pay them the same? Are experience, sen-iority, educational background, and other factorsrelevant and legal to rely on? If I have maleworkers in San Francisco versus female workersin Lancaster, and the cost of living is vastly dif-ferent, may I pay them differently? We justdon’t know what the standards will be, so we’rein a wait and see situation. In the meantime,employers would be smart to audit theiremployee compensation based on gender (andother protected categories) to determine wherethe hot spots might be; and do this with yourattorney involved to maintain privilege and con-fidentiality over sensitive information that couldotherwise be discoverable later in a lawsuit.

◆ What’s the latest from the federal gov-ernment on its salaried exempt employeetest and the proposed $51,000 salarythreshold?

BENDAVID: The U.S. Department of Labor’s pro-posed rule for salaried exempt employees is stillin the consideration stage. The Notice ofProposed Rulemaking was published on July 6,2015 and interested parties were permitted tocomment by September 4, 2015. There were293,370 comments received and the final rule isexpected to take effect in or around July 2016. Ifpassed, employers will need to ensure theirsalaried exempt employees meet the federal min-imum salary requirement, which is more thanthe California state requirement (currently$41,600).

NEBENS: The Department of Labor’s proposedrule to extend overtime pay was issued in June.With this proposal, workers classified as exemptprofessionals who earn $970 per week wouldneed to be reclassified as nonexempt hourlyemployees and be paid overtime. It would alterthe Fair Labor Standards Act’s salary-level test bychanging the salary threshold from $23,660 per

year to $50,440. Having an annual salary above$50,440 doesn’t automatically classify anemployee as exempt – they must meet certainrequirements and tests regarding job duties.However, the Department of Labor may revisethe duties test in the final rule in 2016.

◆ If a business has misclassified some ofits employees as exempt salaried workers,how can that company fix the situationwithout buying a lawsuit?

LIGHT: It’s problematic. There is no easy answer.Some clients just pay and move on. Othersmake clear that it’s too much money and theycan’t pay. Options then are to bury the changein other actions such as: It’s a new year and newpolicies; your job description is changing; wehave a new handbook and new policies; hey,now you get overtime; the lawyers made us doit. Also, when setting an hourly rate, don’t lowerthe hourly rate from their existing salary inorder to absorb the expected overtime.Employees really hate that and you’re buying aclaim in that situation. Try to manage the over-time and slow play bonuses and raises to absorbthe extra expense.

MINKOW: When employees are misclassified, theexposure is typically unpaid overtime and premi-ums for missed meal periods and rest breaks.Fixing this problem and minimizing litigationrisk is difficult, unless the employer makes theemployee “whole” with regard to the unpaidwages. To do this, we recommend the employerestimate the actual wages and penalties owed tothe affected employee and cut them a check.Obtaining a release in connection with this pay-ment is also advised and the parties mustacknowledge in that release that a good faith dis-pute exists with regard to the unpaid wages.Without this language, there is a risk the releasecould be invalid as releasing wages that are owedto an employee is generally a violation of publicpolicy. Simply changing the employee’s status tonon-exempt, without any explanation or pay-ment, can be risky.

◆ Assuming employees actually qualifyas independent contractors, are there anyissues businesses need to be aware of indrafting agreements with them?

BENDAVID: The terms “employee” and “inde-pendent contractor” are very two distinct con-cepts. If a worker truly qualifies as an independ-ent contractor, the company retaining the con-tractor should ensure its contract clearly con-firms the contractor status. It should includedefense, indemnification and hold harmless pro-visions, among other terms. Caution should beused when it comes to “work made for hire”provisions. Including those that might result ina finding that the contractor was actually anemployee (see e.g., Labor Code Sections3351.5(c), 686 and 621(d). The EDD states that,in some cases, including a work made for hireprovision in a contract can create a statutoryemployee.

◆ Which pay practices are most likely toresult in a company being sued in awage-hour class action?

LIGHT: Failure of supervisors (who aren’t trainedproperly) to follow meal and rest break rules;pay stubs missing one or more of the nine piecesof information required; Off the clock work suchas travel time or preparatory/end-of-day work(e.g., putting on multiple pieces of clothing orequipment); failure to reimburse for personal

equipment use (e.g., cell phones); improper timecard rounding practices; improper classificationof supervisors as exempt from overtime (e.g., fastfood and retail). A properly drafted arbitrationagreement can cut down on the exposure byeliminating class action—but not PAGA claimsthat carry a one-year statute of limitation. Still,that’s better than four years in class action.

BENDAVID: Employers are most likely to violatewage and hour laws due to lack of knowledge,rather than conscious efforts to game the sys-tem. It gets complicated considering differentcity ordinances affecting compensation. Forexample, some San Fernando Valley employersmay not realize they must comply with higherCity of Los Angeles minimum wage standards,which increases to $10.50 per hour on July 1,2016 or 2017, depending on company size. Alsoremember that minimum thresholds for exemptemployees increased, and may rise significantlyat the federal level shortly. Add the complica-tions of meal and rest breaks rules, which spurmore claims, notwithstanding the favorableBrinker ruling which held that employers neednot play “meal police.” Questions debatingWHY employees didn’t take breaks and whetheremployer practices caused them to be denied aremaking the rounds in Courts. Additionally,employers should be very careful regarding thereimbursement of employee expenses, ensuringleave is administered properly, and that employ-ees and independent contractors are properlyclassified.

◆ Does it make sense for businesses tocombine their vacation and sick time intoa single PTO policy?

LIGHT: It depends on what the goal is. PTO ismuch less labor intensive because an employerdoesn’t have to track the basis for the absenceand there’s only one category to track. If youdon’t want to pay out sick time at departure youdon’t have to; but if it’s lumped in with vacationas PTO, then of course it all must be paid. So,bottom line, is it convenience or expense thatyou are concerned about?

ROSENBERG: Under the new paid sick leave law,the usage rules only apply to actual paid sickdays. That’s a good reason to segregate themfrom PTO. Otherwise, all of the company’s PTObenefits will be subject to the sick pay law’sonerous carryover, pay stub reporting and usagerules. Also, if the company’s PTO includes vaca-tion, then the entire PTO balance must be paidwhen the employee leaves paid the employeesthe employment and the employee can collectstiff penalties for late payment. In contrast,accrued sick pay does not have to be paid outwhen the employee leaves the employment.This is yet another reason to separate the sickpay benefits from other PTO.

◆ How meaningful are online photos ofpeople when it comes to the hiringprocess?

NEBENS: Photos are usually one of the firstthings that pop up when an employer searchesfor a prospective employee online. Onlinescreening can be a great way to quickly gatheradditional information from an applicant thatisn’t available in their normal application mate-rials. A candidate’s activity online can be a greatway to identify their involvement within yourindustry and get a glimpse at their work attitudeor their expertise. However, it’s important tonote that online photos and searches can revealsensitive or discriminatory information, such asage, religion, marital status, etc. It is important



LightGabler is the modern interpretation of a law firm where

“No” is replaced by “Yes,” and “No way” is replaced by

“Let’s find a way.” Forget everything you knew about law

firms and think about a new team on your side of the table.

805.248.7208 | 760 Paseo Camarillo, Suite 300 | Camarillo, CA 93010 | LightGablerLaw.com

Tired of hearing “You can’t do that” from your lawyers?

Frankly,we don’t blame you.

We Make Business Work®

EMPLOYMENT LAW BUSINESS LITIGATION INTELLECTUAL PROPERTY




FindingFinancialIT Professionals

The First Time!

TRY THE DIFFERENCE

Equis Staffing has the expertise to find you the right job –or the right employee for the job – the first times. Contactus today and experience the Equis Diff erence in staffi ng.

27001 Agoura Rd #160, Calabasas 91031(818) 444-0100 • equisdiff erence.com

not to misuse the information you glean froman applicant’s online presence. Online searchescan be a great tool for gaining insights aboutapplicants, but proceed carefully.

◆ What are your thoughts on AB 1017,which proposed that employers may notrequest compensation history from appli-cants?

LIGHT: It was vetoed, so that’s good news.Compensation history is relevant to the hiringprocess but it wouldn’t be fatal for employersnot to have that information. “Salary require-ments” do help weed out candidates who maynot fit the budget, but you’ll learn that soonenough when your offer is rejected. Still, wouldbe useful to have that information at the frontend and hopefully we won’t see that bill resur-face.

ROSENBERG: If AB 1017 had passed, it wouldhave outlawed the practice of asking a jobapplicant for their salary history and prohibitedemployers from pegging an applicant’s salaryoffer to what he or she made in their last posi-tion(s). Proponents of gender pay equity arguethat the law was necessary because the marketis rigged against women and that setting wagesto past salary simply locks in the previous payinequity. The other side argues that ignoringthe market makes no sense at all and that a cur-rent prospective employer can’t be responsiblefor a previous employer’s decisions about pay.

◆ Can an employer legally impose a rulebarring the employment of job applicantswith criminal records?

ROSENBERG: Yes, but employers have to useextreme caution whenever inquiring into crim-inal background. California law prohibitsemployers from asking about (or using) arrestand certain conviction records when evaluatingjob applicants. Employers must know theserules and scrub employment application formsfor prohibited inquiries. The simple questionfound on many job application forms, “Haveyou ever been convicted of a crime?” is illegal inCalifornia. Further, EEOC has stated that a banon the hiring all convicted criminals is illegal.Rather, EEOC demands a more nuanced processthat requires an employer to show that there isa real connection between the criminal offenseand the applicant’s intended job duties. Finally,the answer may very well depend on whichcity the employee will be working in or thetype of job. Several municipalities have passedtheir own restrictive ordinances on the subject.On the other hand, certain jobs like lawenforcement, teachers, nurses, and thoseinvolving minors or the mentally impairedmay mandate extensive criminal backgroundchecks.

BENDAVID: Generally, if an employer has acomplete bar on hiring applicants with crimi-nal records, the employer may be accused ofdiscrimination. Caution should be used toensure that the conviction is related to the jobfor which the applicant is seeking to be hired.For example, a driving under the influenceconviction may be a bar to hiring for a drivingposition.

◆ What are some legal issues that companies often overlook during a layoffor termination process?

MINKOW: There are many issues an employershould consider prior to terminating anemployee. First, employer must make sure thatemployees are paid all wages due and owing atthe time of termination, including all accruedand unused vacation. Believe it or not, manyemployers overlook this basic requirement.Employers should also ensure that all employ-ment-related decisions are based on legitimate,non-discriminatory reasons and have appropri-ate documentation to support such decisionsshould they be challenged. Second, all deci-sions should be made consistently. For exam-ple, if a company decides to terminate anemployee for excessive absences, the decisionmakers should feel confident the attendancepolicy is applied consistently to all employees,otherwise the affected employee might claimhe or she was singled out for some discrimina-tory reason. If the layoff or termination mayexpose the company to some risk, the employ-er might consider obtaining a valid release inexchange for some amount of severance from adeparting employee.

LIGHT: An age discrimination claim is themost common result of a layoff or reductionin force. Employers should conduct a censusof the “before and after” of their workforcecomposition to determine if they have toomany older workers in the layoff group (orworkers in other protected categories).Adjustments may need to be made as a result.Also, don’t overlook that employers may layoff employees on leave if handled properly.Those employees aren’t immune from layoffjust because of that status. Document thelegitimate business reasons for all layoff deci-sions. You may need that later to defend aclaim.


LABOR & EMPLOYMENT ROUNDTABLE 2016...2016/01/25 · 11 20_sfvbj_labor_employment_roundtable.qxp...

Documents

Transcript of LABOR & EMPLOYMENT ROUNDTABLE 2016...2016/01/25 · 11 20_sfvbj_labor_employment_roundtable.qxp...