Discrimination, Harassment, Holiday Parties, Minimum Wage

Holiday Parties and the Law

The holiday party season is upon us, so, do employers and employees have any special concerns with holiday office parties?  Of course they do.  Luckily, employers can take steps to limit their liability exposure, and employees can keep an eye out to protect themselves.

Around holiday time, alcohol often influences how people behave.  As a rule, employees should watch how much they drink, and employers should contain the influence of alcohol during their company sponsored parties.  Common types of cases related to office holiday parties include: third party claims against intoxicated employees, sexual harassment claims, worker compensation claims, and wage claims.  As you can probably guess, the first three categories often have alcohol consumption involved with them.

For example, in Harris v. Trojan Fireworks Co., (1981) 120 Cal.App.3d 157, an intoxicated employee caused a terrible car accident while driving home from his employer’s party.  The people in the other car were terribly injured.  In fact, one person died in the accident.  The appellate court said that California laws generally bar liability for social hosts when a guest gets into a car accident after a party.  However, the court found that the work party situation was different, at least in this case, because, among other things, the party was held at the work place and during work hours, the employer paid the employee to attend, and that employee was encouraged to drink excessively.

Watch out for naughty Santa Clauses at holiday parties.  In one California case, Brennan v. Townsend & O’Leary Enterprises, Inc., (2011) 199 Cal.App.4th 1336, the plaintiff sued partly because of activities at two different parties.  At the first one, the Santa had female employees sit on his lap.  He then proceeded to ask them about their love lives.  At the second party, a different Santa wore a cap with vulgar words.  Ultimately, the employer was able to escape liability, but only after convincing an appellate court to overturn $250,000 jury award.  Employers, make your Santa’s behave!

When an employer requires attendance at a party, the employers may be exposing itself to wage claims.  Often the Courts find that required attendance is a function of employer control.  When an employer exerts control, usually the employee must be paid for the time under which he or she was being controlled.  My advice: Do not require attendance at a holiday party.

The following is a list of things that an employer can do to help contain liability for holiday parties:

  1. Attendance should be voluntary.
  2. Limit the amount of shop talk at the party.
  3. Don’t ask employees to perform special functions at the party.
  4. Invite the families of the employees.
  5. Hold the party away from the work site.
  6. Make sure that sexual harassment training is up-to-date.
  7. Make clear that sexual harassment at the party will not be tolerated.
  8. Harassment policies should cover off location events.
  9. Hold the event after hours or on a weekend.
  10. Don’t take attendance.
  11. Provide plenty of non-alcoholic beverages.
  12. Investigate complaints about party events as seriously as you would investigate other work place complaints.
  13. Choose to not serve alcohol
  14. If the employer chooses to serve alcohol, limit the amount employees can drink.
  15. Have a professional alcohol caterer screen for intoxication.
  16. Only give out a limited number of drink tickets.
  17. Have employees pay for the drinks they consume.
  18. Arrange for alternative transportation.
  19. Provide discounted rates at the hotel where the party is located.
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Bars, Meals and Breaks, Restaurants, Tips

RESTAURANTS AND BAR LABOR ISSUES

All general labor laws apply to restaurants and bars.  However, a few of those laws have raised some special issues for them.

In the year 2000, the legislature amended the gratuity statute, Labor Code §350.  It clarified how the house and servers handle tips.

The house may not share tips with servers (Labor Code §351), and the employer must track all tips that it collects for employees (Labor Code §353).  An employer cannot credit tips against wages it has agreed to pay to servers, and servers must earn at least minimum wage.

However, an employer may require tip pooling.  The tip pool arrangement must be fair and reasonable.  Only those who are in the chain of service can be in the pool.  For instance, an employer cannot require servers to include cooks and dishwashers in the pool.

Finally, tips are taxable income.  The IRS now requires all tips to be declared.  Technically, all persons who receive tips, or a share of the tips, must report it as income.  Unfortunately for certain servers, some employers allocate the entire tip to the waiter or waitress even when a portion of the tip is shared with others.  In that case, the server appears to the IRS as the only person who earned the tip.  In contrast, the employer should report shared tips and should tell the IRS how much each person in the chain of service received from the tip.

Meal periods and rest periods are sometimes a problem in the serving industry.  Typically, a server does not like to leave tables for meal periods and breaks when a tip is due from those tables.  For that reason, some servers like to skip breaks.  A few years ago, the California Supreme Court clarified the laws in that area.  (Brinker Restaurant Corporation v. Superior Court, (2012) 53 Cal.4th 1004)

In Brinker, the Supreme Court said that employers have a duty to “provide” meal periods for its qualifying employees.  The plaintiffs had argued that employers had to “ensure” that employees got meal periods.  The Court declined to place that burden on employers and found that an employer only needed to provide an opportunity to take a meal break.

In the Brinker case, the California Supreme Court also clarified the law pertaining to rest periods.  According to the regulations, employers must “authorized and permit all employees to take rest periods.”  The Brinker Court defined the meaning of “authorize” in that context.  It said that an employee is entitled to a 10 minute, uninterrupted rest period if the employee’s shift is at least 3.5 hours.  An employee is entitled to a second rest period if his or her shift is at least 6 hours and is entitled to a third rest period if the shift is at least 10 hours long.

Employees can elect not to take their meal periods and rest periods, but allowing them to not take them can create the appearance of violations.  One method for guarding against that appearance is to keep a break log.  If the employee did not take one, the employee should explain why not on the log.  The downside of keeping a break log is the written log could potentially be used to prove the employee’s case, but, on the other hand, good management techniques can address potential problems before they become serious.

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Sick Leave

PAID SICK LEAVE IN CALIFORNIA

California’s new sick leave law went into effect on July 1 of this year.  It applies to all employers, no matter how many employees an employer has.  There are very few exceptions, so all California employers need to know the law.  The limited exceptions to the new sick leave law are: (1) Certain union employees, (2) State in home care workers, (3) Some air carrier employees.

Employers must give sick leave to employees who have worked at least 30 days within the employment year.  The sick leave accrues at the rate of 1 hour for every 30 hours worked.  Employers may provide only 24 hours (3 days) of sick leave per year if the employer offers its employees three sick days at the beginning of the employment year.  Barring that, an employer must allow its employees to accumulate up to 6 days of sick leave per year.  Nevertheless, an employer may still limit sick leave to just 3 days per year.  In that case, unused leave must be carried over to the next year.  After 90 days of employment, employees may begin to use accrued sick.

Employers must track sick leave accumulation either on employee wage statements or on separate sick leave statements.  An employer can avoid the tracking headache by creating a policy in which employees receive at least 24 hours of sick leave at the beginning of each year.  In that case, the only thing to track is the amount that the employee uses during the year.  Employers must maintain records that track the accumulation and use of sick leave for a period of 3 years.

If tracked separately from vacation or PTO, California will not consider sick leave as a wage.  In that case, an employer will not need to pay remaining balances to a terminated employee at the time of termination.  However, if an employer includes sick leave with either vacation or PTO, then the sick leave will become a wage and will need to be paid out as wages at the time of termination.

Sick leave may be used for an employee’s health condition or for the health condition of a family member of an employee.  The code defines “family” very broadly: Child, Parent, Spouse or registered domestic partner, Grandparent, Grandchild, and Sibling.  An employee can also use sick leave for preventive care, domestic violence, sexual assault, and stalking.

No employer may retaliate against an employee for requesting sick time off or for attempting to enforce sick leave rights.  The employer may require employees to us a minimum amount of sick leave, but that minimum amount may not be greater than 2 hours.  Nevertheless, employees have the right to determine how much sick leave to use as long as they use at least the minimum amount.  An employer must display a poster describing the requirements of the law.

The associated fines are very stiff.  An employee can collect up to $250 for each withheld sick day, up to a maximum of $4,000.  If the employee suffers other related harm, such as a wrongful termination, then the employer can suffer civil penalties of $50 for each day the violation remains uncorrected, up to $4,000.  In addition, if an employer does not promptly comply with the law after receiving notice of its violations, then the state can collect a daily penalty of $50 with no limit.  The Private Attorney General Act will allow collective penalties to accumulate.  The prosecuting party can get fines, special damages for the employee(s), costs of suit, and attorneys’ fees.

Employers must be aware of this law.  Ignoring it, or the rights conferred, can come at a hefty price.

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Discrimination, Harassment

Discrimination in the Work Place

 

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Workplace discrimination is illegal under both federal and California law.  Congress passed Title VII in 1964.  About 30 years later, the California legislature passed the Fair Employment and Housing Act (FEHA).  It actually combined previous California anti-discrimination laws that predated Title VII.  They both make adverse employment actions (termination, demotion, failure to hire, etc.) illegal when an employer takes the adverse action because the employee is a member of a protected class.    In most cases Title VII and FEHA work together.  In fact, very often an employee can sue under either law.

For the majority of California employees, FEHA provides greater protection than Title VII.  For instance, Title VII only protects the following classes: race, color, national origin, religion, and sex.  In contrast, FEHA has a far greater list of protected classes: Age, Ancestry, Color, Religion, Denial of Family and Medical Care Leave, Disability, Marital Status, Medical Condition, Genetic Information, Military and Veteran Status, National Origin, Race, Sex, Gender, Gender Identity, and Gender Expression, Sexual Orientation.  To be fair, other federal laws protect some of the FEHA classes.  For instance, the ADA is the federal law that protects disabled persons.

Another advantage of FEHA is it does not restrict damages.  Under FEHA, compensatory and punitive damages are unlimited.  Depending on the size of the business, federal law limits them to amounts between $50,000 and $300,000.

FEHA also requires more employers to follow its requirements than does Title VII.  FEHA applies to employers who only have 5 employees.  Harassment laws apply to all employers, even if they only have one employee.  In contrast, Title VII only applies to employers who have 15 or more employees.

Courts decisions cause work place discrimination laws to constantly evolve.  For instance, a series of court cases over the past few decades have broadened and strengthened employer liability for third party discrimination.  Both federal and state laws clearly require employers to protect employees from supervisors and co-workers who discriminate.  On the other hand, over the years, case law has employers must protect its employees from discrimination at the hands of non-employees who interact with employees during the work day.  The cases say that because the employer controls the conditions of work, employers have a duty to protect employees from unwanted discrimination by non-employees.

In other instances, the law has become more restrictive.  For instance, in California the courts have made it harder for employees to sue when an employer may have had a mixed motive for firing an employee.  A mixed motive case is one where the employer has more than one potential reason for terminating, demoting, or taking other adverse action against an employee.  At least one of the reasons is based on discrimination, and at least one is a legitimate business reason for taking the action.  Typically, the employee claims that the employer discriminated against him or her under FEHA, and the employer claims that it had a legitimate, non-discriminatory reason for punishing the employee.  In the past, lawyers who represented employees said that an employee only needed to show that the discriminatory reason was a factor that could have motivated the action.  Now, the California Supreme Court has made clear that the discriminatory reason must be a “substantial” factor that caused the employer to act.  Further, even if the employee proves that discrimination was a substantial factor, the law allows the employer to present facts to show that it still terminated the employee for a non-discriminatory reason.  If an employer can convince a judge or a jury of that, then the employee will not be able to collect compensatory or punitive damages under FEHA.  Injunctive relief and attorneys’ fees are still available though.

Work place discrimination laws are very complicated to apply.  Employers should make sure they have expertise at their disposal to help analyze each situation as it arises.  Employees often need help analyzing the law to understand whether they have suffered discrimination or harassment as those terms are defined under the law.

S. Ward Heinrichs, Esq.
BACKSTROM & HEINRICHS
Attorneys at Law
A Professional Corporation
4565 Ruffner Street, Suite 207
San Diego, CA 92111
(858) 292-0792
(858) 408-7543 (fax)

http://bestemploymentattorneysandiego.com/
http://twitter.com/#!/WardHeinrichs
www.facebook.com/BackstromandHeinrichs
http://www.linkedin.com/pub/ward-heinrichs/45/806/83b  

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Employment Documents

EMPLOYMENT DOCUMENTS: What Employees Can Demand; What Employers Need to Keep

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Three code sections deal with general employment document retention.  They are: Labor Code §§ 226, 432, and 1198.5.  Code section 1198.5 was most recently amended and those amendments give employees more access to documents and require employers to retain more documents.

Labor Code § 432 requires an employer to give to an employee any document about obtaining or holding employment signed by the employee whenever an employee asks for a copy.  Most employers rather not worry about what documents concern “obtaining or holding employment”, and, consequently, they retain all signed documents.  Because the code section does not set a retention time limit, most employers retain those documents indefinitely and turn them over when an employee request all the documents he or she has signed.

Labor Code § 226 requires an employer to maintain wage statements for three years.  (Labor Code § 226(a).)  When an employee makes either a written or oral request to inspect and/or copy employment records, an employer must allow the employee to inspect and copy those records no later than 21 days after the request.  (Labor Code § 226(b and c).)  However, an employer has a duty to allow inspection and copying more quickly if that can be accomplished practically.  (Labor Code § 226(c).)  If the employer fails to respond in a timely manner, then it may be required to pay a $750 fine, costs, and attorneys’ fees.  (Labor Code § 226(f and g).)  If the employer provides copies, then it may charge the employee for the cost of copying the records.

Labor Code § 226(b) allows a current or former employee to “inspect or copy records pertaining to their employment”.  Apparently, under that subsection, an employee has the right to inspect and copy more records than just the wage statements described in Labor Code § 226(a).

Labor Code § 1198.5 requires an employer to keep personnel records for at least three years.  (Labor Code § 1198.5(c)(1).)  The employee must demand to inspect and/or copy in writing.  (Labor Code § 1198.5(b)(2)(A)(i and ii).)  The employee may also demand that the employer provide copies, but the employer can ask to be reimbursed for copying costs.  (Labor Code § 1198.5(b)(1).)  The employer must comply within 30 days.  (Labor Code § 1198.5(b)(1).)  An employer must comply with only one request per year from a former employee.  (Labor Code § 1198.5(d).)  An employer is not required to comply with more than 50 requests per month.  (Labor Code § 1198.5(p).)  Employers with union represented workers may be exempt.  (Labor Code § 1198.5(q).)  Personnel records are broadly defined as records “relating to the employee’s performance or to any grievance concerning the employee.”  (Labor Code § 1198.5(a).)  Certain records are specifically excluded.  (Labor Code § 1198.5(h).)  If the employer fails to respond in a timely manner, then it may be required to pay a $750 fine, costs, and attorneys’ fees.  (Labor Code § 1198.5(k and l).)

Under Labor Code § 1198.5, an employer has fairly broad discretion to determine what to keep in a personnel file.  However, Labor Code §226(b) appears to allow an employee to have access to any records “pertaining to” his or her employment.  Does 226 require an employer to maintain additional records beyond wage statements (Labor Code § 226(a)), signed documents ((Labor Code § 432), and personnel records (Labor Code § 1198.5(a))?  Arguably, it does.  On the other hand, an employer can argue that Labor Code § 226(b) only requires those records that it kept as part of its effort to reasonably comply with Labor Code §§ 226(a)), 432, and 1198.5.

Similarly, if an employee orally requests records under Labor Code § 226(b), will the employer be required to provide all retained documents within 21 days, even personnel documents governed by Labor Code § 1198.5?  Again, the answer is arguably yes.

S. Ward Heinrichs, Esq.
BACKSTROM & HEINRICHS
Attorneys at Law
A Professional Corporation
4565 Ruffner Street, Suite 207
San Diego, CA 92111
(858) 292-0792
(858) 408-7543 (fax)

http://bestemploymentattorneysandiego.com/

http://twitter.com/#!/WardHeinrichs

www.facebook.com/BackstromandHeinrichs

http://www.linkedin.com/pub/ward-heinrichs/45/806/83b

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Telecommuting, Working from Home

Working from Home Podcast

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On February 26, 2014, I gave a radio interview about the legal and practical issues of working from home.  Please click this link to listen: http://www.bigblendradio.com/February-26-2014.html.  The related article was posted on this blog.  Feel free to add comments about the article or the radio show.

S. Ward Heinrichs, Esq.
BACKSTROM & HEINRICHS
Attorneys at Law
A Professional Corporation
4565 Ruffner Street, Suite 207
San Diego, CA 92111
(858) 292-0792
(858) 408-7543 (fax)

http://bestemploymentattorneysandiego.com/

http://twitter.com/#!/WardHeinrichs

www.facebook.com/BackstromandHeinrichs

http://www.linkedin.com/pub/ward-heinrichs/45/806/83b

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Telecommuting, Work-at-home

Working from Home

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As a society, Americans are finding more opportunities to work from home.  In fact, the work-at-home trend has been growing steadily over the past two decades.  While this trend creates opportunities, it also creates problems for both employees and employers.

Have you seen emails claiming to offer work opportunities that provide thousands of dollars of monthly income in your spare time while working from home?  Many of those emails are scams.  Employees should watch out for offers that make unrealistic claims.  Those offers may simply be trying to get personal information to use in identity theft.  More likely, the email is simply a disguised sales pitch.  Regardless, neither are offers most job hunters welcome.

Some websites try to sift through the at-home work offers to present only the most reliable ones.  One of those websites is: http://www.flexjobs.com/.  Flexjobs makes a top one hundred list of companies who offer the best quality telecommuting jobs.  According to the list, some of the top telecommuting industries are: healthcare, sales, marketing, information technology, and education.

Working from home can test how we apply our employment law regulations.  For instance, can at-home workers be classified as independent contractors, or are they employees?  Generally, employers want to pay workers as independent contractors because employers need not pay for workers’ compensation insurance, withhold taxes, pay overtime, and adhere to break regulations, etc. for independent contractors.  The tests that determine whether a worker is an independent contractor or an employee are fairly complicated and fact intensive.  Please review our blog post to get a better idea of how those tests work: https://backstromandheinrichsblog.wordpress.com/2013/11/13/independent-contractor-or-employee/.

Essentially, an independent contractor controls the manner and method of completing a job.  On the other hand, an employer controls how, when, where, etc. an employee does the work.  For example, an attorney who has his or her own clients works as an independent contractor.  In that case, an attorney can elect to work from home and the client will have no say about that.  In addition, the client does not need to worry about whether the attorney is working overtime hours or is taking meal and rest periods.  In contrast, an hourly worker who works from home sorting through and organizing emails for several managers of a business is probably a non-exempt employee.  In that case, the employer will need to abide by applicable labor laws, such as: break times, minimum wage, overtime premium pay, wage withholding, etc.

Employers, who have work-at-home employees, lose some control over work product because no manager is on site to make sure that the work is getting done.  In those cases, a wise employer will have systems in place to monitor work efficiency.  In our example above, the employer might require the employee to read and organize 30 emails an hour.  Depending on the situation, many other methods of employee monitoring can apply.

Monitoring work schedules and work hours may also be a very important issue.  If an hourly employee works more than 8 hours in a day, the employer must pay overtime in California.  That same California employee will be entitled to at least two rest periods and a meal period during that shift.  If the employee works through those break times, the employer will be liable for additional penalties and wages.  One way of helping to ensure compliance with overtime, rest period, and meal period regulations is to have an online time clock.  Again, without a manager present, ensuring that an employee is actually working the hours that are tallied in the online program may be a challenge.

Working from home is not the norm, but it is becoming increasingly popular.  Commonly, we see good at-home work opportunities, but workers seeking those jobs must be careful of scams.  Likewise, employers need to carefully navigate the world of employment regulations after adding at home workers to its roles.  Employers need to decide whether those workers are independent contractors or employees.  If they are employees, then the employer must put into place systems and policies that will check work efficiency and monitor adherence to employment regulations.

S. Ward Heinrichs, Esq.
BACKSTROM & HEINRICHS
Attorneys at Law
A Professional Corporation
4565 Ruffner Street, Suite 206
San Diego, CA 92111
(858) 292-0792
(858) 874-8850 (fax)

http://www.backstromandheinrichs.com

http://twitter.com/#!/WardHeinrichs

www.facebook.com/BackstromandHeinrichs

http://www.linkedin.com/pub/ward-heinrichs/45/806/83b

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