Labor and Employment

By: Jessica Shoendeist

California employers hoped for significant changes following Governor Brown’s budget proposal that called for the Labor and Workforce Development Agency (LWDA) to have more oversight of claims made under the Private Attorneys General Act of 2004 (PAGA).   The budget proposal noted that the departments tasked with investigation and enforcement of the Labor Code has never “had the staffing and resources to effectively review notices, or choose cases for further investigation.”  This is especially true given that the notices are currently being reviewed by a single employee.

Employers in California were optimistic that Governor Brown’s proposal to establish a PAGA unit and hire new employee would reduce unnecessary litigation and lower the cost of doing business.  Although such investigations may still lead to claims and the payment of civil penalties, employers in California were encouraged by the belief that the LWDA would refuse to impose frivolous actions.  Nor would employers be required to pay for attorneys’ fees anytime civil penalties are due.  Unfortunately, Governor Brown’s original proposals were not enacted.  The amendments to PAGA that were enacted do not alleviate most employers concerns with PAGA.  The amendments focus on the procedure rather than substance.  The amendments became effective June 27, 2016.  The amendments provide five primary changes.

The California Labor Commissioner Launches New On-Line Reporting System

On August 31st, the Department of Industrial Relations (Labor Commissioner) launched an online system allowing anyone to report a business’ alleged labor law violations. According to the Labor Commissioner’s Press Release, the new online reporting system is simple to use and enables the Labor Commissioner to receive real time leads on businesses that are breaking labor laws so that it’s Bureau of Field Enforcement can investigate and take enforcement action. The Report of Labor Law Violations (“Report”) can be completed and submitted on-line or it can be printed out for completion and either mailed in or hand-delivered to the Labor Commissioner’s Office. The Report asks a number of questions about: 1) the identity and location of the employer being reported; 2) the number of employees; 3) the employers’ business hours; 4) whether the employer has a union contract; 5) the designated workweek and normal/standard work schedule; 6) when meal and rest periods are scheduled; 7) whether the employer keeps time records; 8) the employer’s pay day and method of payment; 9) how employees are paid (hourly, salary, piece rate, etc.); and 10) what languages are spoken by employees at the company.The Types of Suspected Violations that Can Be Reported Include:

• Failure to maintain workers’ compensation insurance
• Child labor violations
• Minimum wage violations
• Overtime violations
• Pay stub violations
• Meal period violations
• Rest break violations
• Pay date violations
• Business expense reimbursement violations
• Recordkeeping violations
• Other wage violations (e.g. failure to pay at a contract rate or pay premium pay for missed meal or rest breaks)
• Mandatory posting violations
• Misclassification violations (independent contractor v. employee, exempt v. non-exempt)
• Licensing/registration violations
• Lactation accommodation violations
• Other violations

The Report seeks the name and contact information of the individual making the report but asks expressly if the individual wants his or her name to be used in the investigation or if he or she wants the Labor Commissioner to keep his or her name and contact information confidential. As such, if a Report is made against a company for alleged labor law violations, it is possible that the company may never know who made it.

Takeaway: Employers should regularly audit their wage and hour practices to ensure they are in compliance with California’s very strict – and very technical – wage and hour laws. With the Labor Commissioner’s new on-line reporting system, it will be easier for current or former employees to report what they perceive to be systemic wage and hour violations, and for the Labor Commissioner’s Bureau of Field Enforcement to have more of what the Labor Commissioner refers to as “real time leads” on businesses that may be violating the law.

The attorneys in Weintraub Tobin’s Labor & Employment Group are experienced in assisting employers in conducting wage and hour audits. Please feel free to contact any one of them if you need assistance with your audit. https://www.weintraub.com/practice-areas/labor-and-employment.

On May 3, 2016 the Governor of Georgia signed Senate Bill (SB) 277 to amend Chapter 1 of Title 34 of the Official Code of Georgia Annotated.  SB 277 is a very brief and succinct bill that adds the following Section 34-1-9 to Title 34:

“Notwithstanding any order issued by the federal government or any agreement entered into with the federal government by a franchisor or a franchisee, neither a franchisee nor a franchisee’s employee shall be deemed to be an employee of the franchisor for any purpose.”

SB 277 becomes effective on January 1, 2017.

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On August 29, 2016, the EEOC issued new Enforcement Guidance on Retaliation which replaces its 1998 Compliance Manual section on retaliation. The Guidance also addresses the separate “interference” provision under the Americans with Disabilities Act (ADA), which prohibits coercion, threats, or other acts that interfere with the exercise of ADA rights.  According to the EEOC, retaliation is asserted in nearly 45 percent of all charges filed with the EEOC and is the most frequently alleged basis of discrimination.  EEOC Chair Jenny R. Yang said that “[t]he examples and promising practices included in the guidance are aimed at assisting all employers reduce the likelihood of retaliation.”

The Guidance addresses retaliation under each of the statutes enforced by EEOC, including Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act (ADEA), Title V of the Americans with Disabilities Act (ADA), Section 501 of the Rehabilitation Act, the Equal Pay Act (EPA) and Title II of the Genetic Information Nondiscrimination Act (GINA).  Topics explained in the new Guidance include:

• The scope of employee activity protected by the law.
• Legal analysis to be used to determine if evidence supports a claim of retaliation.
• Remedies available for retaliation.
• Rules against interference with the exercise of rights under the ADA.
• Detailed examples of employer actions that may constitute retaliation.

The EEOC has also issued two short user-friendly resource documents to accompany the new Guidance: a question-and-answer publication that summarizes the Guidance, and a short Small Business Fact Sheet that condenses the major points in the Guidance in non-legal language.  To obtain copies of the Guidance or the Q&A or Fact Sheet for Small Businesses, go to https://www.eeoc.gov/laws/guidance/retaliation-qa.cfm.

The U.S. Equal Employment Opportunity Commission (“EEOC”) recently issued two final rules confirming that employers can offer limited incentives (in the form of a reward or avoidance of a penalty) to encourage employees and their spouses to participate in workplace wellness programs.  Under these new rules, employers who offer wellness programs will be allowed to provide such limited incentives to employees or their spouses to induce them to provide information about their current or past health status.  The new rules modify regulations that pertain to Genetic Information Nondiscrimination Act (“GINA”) while creating new regulations that pertain to the Americans with Disabilities Act (“ADA”).

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On July 14, 2016, a three-member panel appointed by the National Labor Relations Board (“NLRB”) reversed an Administrative Law Judge decision in favor of the employee. The Panel found that a complaining employee who was told he was “fired” in a meeting and subsequently told he was not fired after the meeting on the same day, was in fact discharged for purposes of the Act. Thus, the Panel found the employer violated National Labor Relations Act (the “Act”) Section 8(a)(1).

Read more about it here: https://www.nlrb.gov/

Often times, when a company acquires another company, it does not wish to retain all of the other company’s employees.  The employees who do not get brought on board often end up out of work.  Under these circumstances, issues arise over how to handle the laid off employees.  Federal law requires employers to provide at least 60-days’ written notice prior to terminating employees affected by such a merger.  So who is required to provide the notice, the employees’ current employer or the new company that does not wish to retain them? Under federal law, if the employees remain employed as of the day of the sale, the purchasing company assumes responsibility for providing the required notice.  According to the 8^th Circuit, this remains true even where the purchasing company never intended to employ the laid off workers and expressly contracted away the notice obligation when completing the purchase agreement.

Read more about it here: http://blog.hrusa.com/blog/trucking-company-found-in-violation-of-warn-act/