Welcome to the Weintraub Resources section. Here, you can find our Blogs, Videos, and Podcasts, in which Weintraub attorneys regularly provide insights and updates on legal developments. You can also find upcoming Weintraub Events, as well as firm and client News.


New (and Stricter) COVID-19 Rules Implemented By Cal/OSHA – Employers Should Act Now

On November 30, 2020, the California Division of Occupational Safety and Health’s (“Cal/OSHA”) Emergency COVID-19 Prevention Regulation went into effect. The regulations apply to all employers, employees, and to all places of employment with three exceptions: (1) workplaces where there is only one employee who does not have contact with other people; (2) employees who are working from home; and (3) employees who are covered by the Aerosol Transmissible Diseases regulation.

The emergency regulations provide additional requirements on employers in light of the COVID-19 pandemic in the following areas: COVID-19 prevention, the handling of COVID-19 infections and COVID-19 outbreaks (including major outbreaks), COVID-19 prevention in employer-provided housing, and COVID-19 prevention in employer-provided transportation to and from work. Employers should review the regulations in detail to understand how their own workplace might be affected. Among the issues addressed by the emergency regulations, are the following:

  1. Employers must adopt a written COVID-19 Prevention Program containing the following information:
  • Communication to employees about the employer’s COVID-19 prevention procedures
  • Identify, evaluate and correct COVID-19 hazards
  • Physical distancing of at least six feet unless it is not possible
  • Use of face coverings
  • Use engineering controls, administrative controls and personal protective equipment as required to reduce transmission risk
  • Procedures to investigate and respond to COVID-19 cases in the workplace
  • Provide COVID-19 training to employees
  • Provide testing to employees who are exposed to a COVID-19 case, and in the case of multiple infections or a major outbreak, implement regular workplace testing for employees in the exposed work areas
  • Exclusion of COVID-19 cases and exposed employees from the workplace until they are no longer an infection risk
  • Maintain records of COVID-19 cases and report serious illnesses and multiple cases to Cal/OSHA and the local health department, as required
  1. Guidance on dealing with employees who are COVID-19 positive, or who have been exposed to the illness. Specifically, employers are directed to exclude COVID-19-positive employees and those who have been exposed to COVID-19 from the workplace. If the employee is able and available to work, the employer must continue to provide the employee’s pay and benefits, unless the employer can establish the employee’s exposure was not work-related. The employer may require the employee to exhaust paid sick leave benefits before providing exclusion pay, and may offset payments by the amount an employee receives in other benefit payments.
  2. Specific guidance on what additional actions employers must take amidst a major COVID-19 outbreak, which is defined as a covered workplace that has 20 or more COVID-19 cases within a 30 day-period.

Employers can find more information on the Cal/OSHA COVID-19 Guidance and Resources website here, (link https://www.dir.ca.gov/DIRNews/2020/2020-99.html. In addition, FAQ’s on the emergency regulations can be found here (link https://www.dir.ca.gov/dosh/coronavirus/COVID19FAQs.html).

These emergency regulations are now in effect. Employers should immediately review their Cal/OSHA COVID-19 Prevention Plans to ensure compliance with the new regulation. In many cases, employers will need to revise and update their plans, and payroll procedures previously implemented, in order to comply with these new emergency regulations.

The Labor and Employment attorneys at Weintraub Tobin continue to wish you and your family good health during these challenging times.  If we can assist you in any of your employment law needs, feel free to reach out to us.

Business Focus Seminar 2020 – Helping Your Business Survive & Thrive Through COVID-19

  • When: Oct 28, 2020
  • Where: Virtual Event

A video archive for this event is available at this link: https://bit.ly/BusinessFocus2020

On October 28, 2020, Weintraub Tobin partnered with BFBA, Chase Bank, and CVF Capital Partners to present Business Focus 2020: Helping your Business Survive and Thrive Through COVID-19.  The virtual and interactive event addressed the “new normal” business landscape brought about by the economic and social changes of the COVID-19 pandemic.

Business Focus 2020 featured a panel of professional advisors who have assisted small- and medium-sized businesses through the unprecedented challenges presented by the pandemic, followed by a panel of owner-CEOs who shared their experiences navigating 2020’s business disruptions.  Both panels were moderated by Scott Syphax.

The video archive is organized by chapters, so you can choose to watch any aspect of the event on its own.

Advisor Panelists were Weintraub attorney Chris Chediak (Shareholder), Ben Brown  (Managing Partner) with BFBA, Erik Langeland (Market President) with Chase Bank, and Ed McNulty (Managing Partner) with CVF Capital Partners.

CEO Panelists were Tony Powe (Interim CEO & Board Chair) with Cool Mountain Transport, Haru Sakata (CEO) with Mikuni Restaurant Group, Pete Engelken (Chief Operating Officer) with Allworth Financial, and Jason Johnson (CEO & Founder) with Quick Quack Car Wash.

Click here to view the event flyer.

Please keep in mind that the COVID-19 pandemic is a fluid situation and information is constantly being updated. We recommend that you check with your professional advisors to make sure you have the most current information.

New California Laws Create Presumption of Workers’ Compensation Coverage for COVID-19 Infections and Impose Additional COVID-19 Exposure Reporting and Notice Requirements on Employers

California Gov. Gavin Newsom signed Executive Order N-62-20—way back on May 6, 2020—which created a presumption that employees’ COVID-19-related illnesses were caused at work and therefore covered by workers’ compensation. That order covered COVID-19 infections from March 19, 2020 to July 5, 2020, at which time the order expired. To fill the void, on September 17, 2020, Gov. Newsom signed Senate Bill (“SB”) 1159 and Assembly Bill (“AB”) 685 into law.

SB 1159 resets the rebuttable presumption establishing workers’ compensation benefits for certain employees who contract COVID-19. At the same time, California passed AB 685, which allows the state to more closely track COVID-19 cases in the workplace by requiring employers to timely report COVID-19 related exposure information to the California Division of Occupational Safety and Health (“Cal/OSHA”). AB 685 also requires employers to provide notice to employees of workplace COVID-19 exposures.

To read the full article, please click here.

Recent Federal Decision Regarding Business Interruption Insurance Could Mark a Turning Point for COVID-Affected Businesses (Updated 9/29/2020)

Many businesses affected by COVID-19 and the related shelter-in-place orders are turning to their business interruption insurance policies in hope of finding relief. In general terms, a business interruption insurance policy replaces some or all of a business’s income when the business is forced to curtail or cease its operations as the result of a disaster. In the vast majority of cases, insurance companies have turned away COVID-related business interruption claims, claiming that these policies do not provide coverage for COVID-related claims. Rather than fight with insurance companies, many business owners elect to focus their efforts on other forms of relief, including PPP loans and other forms of public assistance. But some, like the owner of the world-renowned Napa Valley restaurant The French Laundry, have sued to enforce their business interruption insurance policies.

Policy holders contend that their business interruption policies were written as part of “all-risk” property insurance coverages, which are designed to comprehensively protect against all risks except those expressly excluded under the policy terms. The insurance companies’ argument is based on a common policy term referring to “physical damage or loss” as the trigger for business interruption coverage. Insurance companies argue that this term means that coverage exists only where the business has suffered physical damage or physical loss, such as in the case of a fire or a storm—actual, tangible, physical alteration of the business’s property. Under the insurers’ interpretation, no coverage exists because COVID-19 and its effects did not cause physical damage or alteration to the policy holder’s property.

In what policy holders hope marks the start of a growing trend, one federal court in Missouri preliminarily ruled in favor of the insured businesses and against the insurance companies. The case, Studio 417, Inc. v. The Cincinnati Ins. Co. (“Studio 417”),[1] involved a collection of salon and restaurant owners whose business interruption claims were rejected by their insurer based on the physical damage or loss argument. After the businesses filed suit, the insurer brought a motion to dismiss their claims on the grounds that the business interruption policies in place did not afford protection under the express policy terms and applicable law.

The court ruled in favor of the policy holders, finding that they had adequately alleged facts that established coverage and that, based on those allegations, the insurance company wrongfully denied coverage. The court’s reasoning focused on the policies’ “physical damage or loss” triggering language. The court found that the word “or” was meaningful, that it differentiates between the concept of “physical damage” and “physical loss,” and that the business owners need only allege that they had incurred either physical damage or loss to qualify for coverage. The court reasoned that the insurance company’s reading of the policy terms would effectively merge the concepts of “physical damage” and “physical loss,” making the “physical loss” policy term superfluous and meaningless.

Noting that the policy did not specifically define the terms “physical damage” and “physical loss,” the court relied on the plain meaning of those terms, finding that physical loss exists when property is taken from one’s possession or when a business is prevented from using the property. Based on this reading of the policies, the court found that the businesses alleged facts establishing coverage because the COVID-19 virus is a physical substance that rendered the business locations unsafe and, coupled with the government orders, rendered their locations unusable. The alleged presence of the COVID-19 virus onsite was key to the Studio 417 decision.

It is important to note that the Studio 417 decision is not a final determination on the merits of the claims—it merely resolved a motion to dismiss, which is a preliminary motion where the court accepts the plaintiffs’ factual allegations as true and deals only with matters of law. The plaintiffs will still need to prove their claims at trial, which the insurer will undoubtedly defend vigorously. The Studio 417 decision is meaningful, however, because it preliminarily establishes as a matter of law what the business interruption policy terms mean. The burden will be on the plaintiffs to prove the facts establishing “physical loss.”

It is also important to recognize that the Studio 417 decision may not necessarily have far-reaching impact. Although it is a federal court decision, Studio 417 was decided based on Missouri state law; the decision is not binding nationwide. In fact, federal court determinations of state law are not even binding on the Missouri state courts. Studio 417 was, however, recently cited with apparent approval by a federal court in California confronted with similar issues. In that case, Mudpie Inc. v. Travelers Cas. Ins. Co. (“Mudpie”),[2] a similar set of plaintiffs brought a claim for coverage under their business interruption insurance policies. Unlike in Studio 417, the court in California found that the plaintiffs did not allege sufficient facts to establish a claim in Mudpie. But the court gave the plaintiffs an opportunity to amend their claims—to add factual allegations—which indicates the court’s implicit recognition that a COVID-related claim, if based on the right facts, could trigger coverage under a business interruption policy in California.[3]

For business owners who had largely written off the availability of business interruption coverage for relief, Studio 417 presents a ray of hope and potential lifeline for their struggling businesses. The Studio 417 decision might also provide a roadmap for policy holders considering litigation to enforce their policy rights. As federal and local assistance programs wind down and the true effects of the COVID-19 health crisis begin to have more widespread, potentially catastrophic effect, Studio 417 could signal an inclination for courts to find coverage for insured businesses. If such a trend develops, insurance companies will undoubtedly be more inclined to provide or, at least negotiate, some level of relief for their insureds.

It goes without saying that a trend toward enforcing coverage could mean the difference between the success or failure of many businesses. But the implications of coverage are far-reaching, impacting vendors who work with those businesses, landlords whose properties house those businesses, and the development of policy terms going forward. Policyholders are encouraged to resubmit their claims for coverage and monitor the progress of cases in their state to determine whether Studio 417 represents a positive bellwether or merely a mirage. Policyholders should also be on the lookout for changes in policy terms, such as new defined terms, as their policies come up for renewal.

For assistance with reviewing your business interruption policies and other available forms of relief, and/or the effect on your existing obligations, please contact the attorneys at Weintraub Tobin.

[1] Studio 417, Inc. v. The Cincinnati Ins. Co., No. 20-cv-03127-SRB, Order Denying Mot. to Dism., issued Aug. 12, 2020 (W.D. Mo.)

[2] Mudpie Inc. v. Travelers Cas. Ins. Co., No. 20-cv-03213-JST, Order Granting Mot. To Dism., issued Sept. 14, 2020 (N.D. Ca.)

[3] See also, Optical Services USA/JCI v. Franklin Mutual Insurance Co., No. BER-L-3681-20, a recent New Jersey decision reaching a similar conclusion in a matter involving an insurer challenging coverage under a business interruption insurance policy.

California Drastically Alters Obligations under the California Family Rights Act

On Thursday, Governor Newsom signed Senate Bill 1383, dramatically expanding the California Family Rights Act (“CFRA”), and the obligations it places on employers to provide leave to eligible employees. As a reminder, the CFRA is California’s leave statute, which authorizes eligible employees to take up a total of 12 weeks of unpaid job-protected leave during a 12-month period. While on leave, employees keep the same employer-paid health benefits they had while working.

Historically, the CFRA has applied to employers employing at least 50 employees. SB 1383 expands the CFRA to employers throughout the state who employ 5 or more employees.  In addition, SB 1383 expands the definition of a “family member” to include adult children, siblings, grandparents, grandchildren and domestic partners. The changes go into effect on January 1, 2021.

DOL Revises COVID-19 Sick Leave and Family and Medical Leave Rules Following Court Ruling

On September 11, 2020, the United States Department of Labor issued revised regulations governing the Families First Coronavirus Response Act (FFCRA). The regulations implement the Emergency Paid Sick Leave Act (EPSLA) and Emergency Family and Medical Leave Expansion Act (EFMLEA) provisions of the FFCRA. The revised regulations were issued to address a decision from a federal court in New York that invalidated previous regulations concerning whether work must otherwise be available to employees seeking to use leave under EPSLA and EFMLEA and whether an employer must consent to intermittent leave. The revised regulations also clarify and narrow the definition of “health care provider” under the FFCRA and address medical documentation requirements employees must meet to be eligible to take leave.

Refresher on FFCRA

In March 2020, at the outset of the COVID-19 pandemic, Congress enacted the FFCRA. We initially blogged about the FFCRA here. In short, the FFCRA requires employers with 500 or fewer employees to offer up to 2 weeks of EPSLA leave to employees who miss work for qualifying reasons relating to the pandemic. Where the need to miss work results from the employee’s need to stay home with a child whose school or childcare facility is closed due to the pandemic, employees may take up to 12 weeks of paid and unpaid leave under EFMLEA. The first two weeks of EFMLEA leave are unpaid, but employees seeking pay could  choose to use EPSLA leave or any other paid leave otherwise available to the employee such as state law sick leave or any accrued paid vacation benefits. The last 10 weeks of EFMLEA leave are paid. Employers may receive a tax credit for any leave paid out under the FFCRA. Unless extended, the FFCRA is set to expire at the end of 2020.

New York Opinion Invalidates Certain FFCRA Regulations

Last month, in response to a challenge brought by the New York Attorney General, a federal court struck down four provisions of the FFCRA’s prior regulations.  Specifically, the court struck down regulations requiring work to be otherwise available to employees before they can qualify for EPSLA or EFMLEA, requiring employees to obtain employer approval before taking intermittent leave, and requiring employees to provide medical documentation regarding the reasons for leave “prior to” taking the leave. Finally, the court struck down as overbroad the FFCRA’s definition of “health care provider” as used to determine those health care providers who were ineligible for the leave.

The Revised Regulations

Following the New York ruling, the DOL was widely expected to issue revised regulations addressing the items the court raised. The September 11, 2020 DOL release does just that. According to the DOL’s news release, found here, the revisions do the following:

  • Reaffirm and provide additional explanation for the requirement that employees may take FFCRA leave only if work would otherwise be available to them.
  • Reaffirm and provide additional explanation for the requirement that an employee have employer approval to take FFCRA leave intermittently.
  • Revise the definition of “healthcare provider” to include only employees who meet the definition of that term under the Family and Medical Leave Act regulations or who are employed to provide diagnostic services, preventative services, treatment services or other services that are integrated with and necessary to the provision of patient care which, if not provided, would adversely impact patient care.
  • Clarify that employees must provide required documentation supporting their need for FFCRA leave to their employers as soon as practicable.
  • Correct an inconsistency regarding when employees may be required to provide notice of a need to take expanded family and medical leave to their employers.

Work Availability Requirement

The DOL’s position that work must be available to an employee seeking to take leave reflects a doubling down on their regulation that the court struck down. Recognizing the court’s opinion that the prior regulation lacked sufficient analysis of why work must be available to the employee, the DOL provided that analysis. The DOL clarified that when work is unavailable due to circumstances other than a FFCRA-qualifying reason, such as when an employee is furloughed or the business is temporarily shut down, there is no work available from which an employee can take leave.

The DOL further explained that “leave is most simply and clearly understood as an authorized absence from work; if an employee is not expected or required to work, he or she is not taking leave.” In those circumstances, an employee’s recourse may instead be to file for unemployment insurance benefits. The revised regulation does, however, make clear that employers cannot withhold work in order to avoid paying EFMLEA or EPSLA. Instead, work must be unavailable for legitimate business reasons.

Employer Consent to Intermittent Leave

Just as with the work availability requirement, the New York court struck down the requirement that employees taking intermittent EPSLA or EFMLEA leave must obtain employer consent because, according to the court, the DOL’s initial rule lacked sufficient analysis and explanation for the requirement. Again, the DOL doubled down on its prior rule while providing much more detailed reasoning for it. The DOL noted that the FMLA provides for intermittent leave only for qualifying reasons, such as medical necessity and employer/employee agreement. Because the FFCRA is silent on employees’ ability to take intermittent leave, and because the “medical necessity” basis for leave under the FMLA does not fit within the EFMLEA framework, the DOL concluded that it had discretion to balance employees’ need for leave with employers’ need to avoid business disruptions. It balanced those competing interests by requiring employees to obtain employer consent to take intermittent leave.

Narrowed Definition of Health Care Provider under Exemption

The FFCRA exempts employers from offering EFMLEA or EPSLA to certain health care providers. The previous definition, which the New York court struck down as too broad, included “anyone employed at” any location “where medical services are provided.” This could have included those workers at the facilities who did not even provide healthcare services, such as IT staff, human resources, or kitchen workers. Under the revised rule, “[a] person is not a health care provider merely because his or her employer provides health care services or because he or she provides a service that affects the provision of health care services.” Rather, the employee must meet the definition of healthcare provider under the FMLA (essentially, those workers who directly provide the healthcare services), or those who are “employed to provide diagnostic services, preventive services, treatment services or other services that are integrated with and necessary to the provision of patient care and, if not provided, would adversely impact patient care.”

Notice and Documentation Requirements

Under the prior rules, struck down by the New York court, employees were required to provide employers with notice of the need for FFCRA leave, and documentation supporting the need for leave, prior to being eligible. Under the revised regulation, employees are now only required to provide notice and documentation “as soon as practicable.”  The DOL did note, however, that in the cases of employees needing leave due to a child’s school closure, the leave will almost always be foreseeable in advance and should therefore be provided prior to the leave being taken.

Takeaway for Employers

For now, employers can follow the new DOL regulations in administering FFCRA leave. That means employers are not obligated to provide EFMLEA or EPSLA leave to employees who are furloughed or are otherwise unable to work for reasons that do not relate to the COVID-19 pandemic. Employers may also decide whether to allow employees intermittent leave under the FFCRA. Such decisions, however, should be made for legitimate business reasons and applied consistently to avoid the risk of discrimination claims. Employers in the healthcare industry may utilize the updated definitions of healthcare provider in assessing whether employees are eligible for FFCRA leave. Finally, employers should not require employees to provide notice and documentation supporting their need for FFCRA leave any earlier than is practicable under the circumstances.

Employers should also watch for future developments around these regulations. First, it is not yet known whether they will be subjected to any further court challenges and, if so, what the outcome of those challenges will be. Employers should also monitor whether Congress elects to extend the FFCRA, with or without modifications, beyond its current expiration date of December 31, 2020. Employers with any uncertainty in these areas should work with their legal counsel to assure their practices and policies are compliant.

Recent Case Confirms Need for Landlords and Tenants to Address Force Majeure and COVID-19 in All Current and Future Agreements

While the effects of the COVID-19 health crisis have impacted daily life for months, the legal implications of this pandemic are just starting to develop. Unforeseen conditions often wreak havoc on existing contractual relationships, which are typically based on factual assumptions that, due to unexpected conditions like COVID-19, may no longer be appropriate. Many parties work through these circumstances through negotiation, reconciling their previous expectations and current conditions with their desired outcome, but these negotiations aren’t always successful. When these discussions fail, the parties are typically left to battle out their interests in a legal setting, often relying on inapplicable contractual provisions and outdated legal precedent. Few participants leave these litigated disputes happy.

A recent case shows how disputes resulting from the COVID-19 health crisis may play out in the near future. In In re Hitz Restaurant Group,1 the court considered whether a force majeure provision in a lease excused a restaurant operator’s obligation to pay rent. The case arose in the context of the tenant’s bankruptcy, with the court deciding whether the tenant was required to pay rent under the lease pending resolution of the bankruptcy proceeding.2 The lease in dispute included a force majeure clause which excused performance by a party of “any of its obligations [that] are prevented or delayed, retarded or hindered by . . . laws, governmental action or inaction, orders of government.” The tenant, relying on its governor’s order requiring “all businesses . . . that offer food or beverages for on-premises consumption to suspend service,” argued that this order qualified as an order of the government which triggered application of the force majeure clause in the lease and therefore excused the tenant’s obligation to pay rent.

The court agreed, finding that the governor’s order fell squarely within the force majeure provision’s scope. The court was unpersuaded by the landlord’s argument that the tenant’s payment obligation should remain enforceable because the government order did not technically prevent the tenant from paying rent (such as by paying rent electronically). In addition, the availability of public resources, such as forgivable SBA loan assistance, did not change the conclusion that force majeure applied. Finally, even though the force majeure provision expressly carved out the excuse of “lack of money,” the court determined that the executive order was the proximate cause of its inability to generate revenue and pay rent and prevailed over the “lack of money” exception.

Interestingly, after the tenant admitted that it could still operate through take-away service during the shutdown, the court engaged in an analysis of the percentage of rent that should be excused. Apparently, neither party provided the court with much information to determine the appropriate amount of rent reduction. The landlord didn’t address the issue and the tenant only stated that approximately 25% of the restaurant’s square footage could have been used for permitted services. Accordingly, the court interpreted the tenant’s estimation as an admission that it owed at least 25% of the rent and ordered that amount to be paid within two weeks of its ruling.

Though we have not interviewed the litigants, this outcome appears unsatisfactory for both landlord and tenant. For the tenant, the fact that its statement regarding use of the square footage of its leased premises was used as the basis for determining rent could be perceived as unfair, as usable square footage doesn’t necessarily indicate whether tenant has full use of such space (such as for in-house dining) or correlate to the impact of the force majeure event. For the landlord, the court’s conclusion supporting application of the force majeure provision despite the tenant’s ability to operate and an express provision carving out lack of money as a justifiable excuse was undoubtedly a bad conclusion. In addition, though, the landlord did not anticipate that the court would consider a percentage reduction in rent and therefore did not introduce evidence supporting a greater percentage of rent to be paid by the tenant, missing the opportunity to argue for a higher monthly rent requirement.

Perhaps the most meaningful conclusion from this case does not arise from its outcome, but rather from the fact that it confirms the unpredictability of court interpretations of lease disputes. Both commercial landlords and tenants enter into lease agreements for the purpose of providing certainty and predictability in their relationship, setting forth the likely (and sometimes unlikely) situations that may occur during the term and pre-negotiating their outcomes. In circumstances like the current pandemic, the unpredictability of judicial interpretations reinforces the need for provisions that comprehensively address unpredictable outcomes like outbreaks, epidemics, and other “acts of god” with reasonable, comprehensive solutions. It also reaffirms the danger of refusing to negotiate a resolution when unforeseen events transpire, as each party risks a negative outcome when relying on a judicial forum to reach a conclusion. In any event, both landlords and tenants risk such unpredictable results when they fail to address acts of force majeure in all of their future agreements given the current circumstances.

For sample force majeure provisions or to further discuss how COVID-19 may affect legal agreements going forward, please contact the attorneys at Weintraub Tobin.

California Issues New Reopening Guidance

On August 28, 2020, California introduced the Blueprint for a Safer Economy, also known as “California’s Plan for Reducing COVID-19 and Adjusting Permitted Sector Activities to Keep Californians Healthy and Safe.” This new Blueprint was devised to aid California residents as the state reopens in the wake of the COVID-19 pandemic. Under this new plan, every county in California is assigned one of four tiers, based on the county’s test positivity and adjusted case rate. A county’s tier will determine what industries are permitted to reopen and what modifications are required.

As defined by the Blueprint, each of California’s 58 counties was assigned to one of the following four tiers based upon the counties health metrics on August 28, 2020, with  Tier 1 (Widespread) being the most restrictive:

(See https://covid19.ca.gov/safer-economy/)

While the California Department of Public Health (“CDPH”) will assess and release the health indicators each week, to move to a less restrictive tier, a county must have been in the current tier for a minimum of three weeks, and must meet criteria for the next tier for the prior two weeks, in order to progress to the next tier. Further, a county can only move forward one tier at a time, even if metrics qualify that county for a more advanced tier. Alternatively, if during the weekly assessment a county’s adjusted case rate and/or test positivity has been within a more restrictive tier for two consecutive weekly periods, the county must revert to the more restrictive tier.

Much of California remains in the “purple” most restrictive tier, which significantly limits what industry sectors are permitted to reopen. A list of each industry sector, and when it is permitted to be open with modifications, can be found here: https://www.cdph.ca.gov/Programs/CID/DCDC/CDPH%20Document%20Library/COVID-19/Dimmer-Framework-August_2020.pdf. As counties move through the tiers, more industry sectors will be permitted to reopen based upon their perceived risk. The criteria being considered by the State to determine low/medium/high risk sectors includes the following:

  • Ability to wear face covers at all times (e.g. eating and drinking would require removal of face covering)
  • Ability to physically distance between individuals from different households
  • Ability to limit the number of people per square foot
  • Ability to limit duration of exposure
  • Ability to limit amount of mixing of people from differing households and communities
  • Ability to limit amount of physical interactions of visitors/patrons
  • Ability to optimize ventilation (e.g. indoor vs outdoor, air exchange and filtration)
  • Ability to limit activities that are known to cause increased spread (e.g. singing, shouting, heavy breathing; loud environs will cause people to raise voice)

The new public health order can be found here: https://www.cdph.ca.gov/Programs/CID/DCDC/CDPH%20Document%20Library/COVID-19/8-28-20_Order-Plan-Reducing-COVID19-Adjusting-Permitted-Sectors-Signed.pdf, and residents can refer to the Blueprint for a Safer Economy website here: https://www.cdph.ca.gov/Programs/CID/DCDC/Pages/COVID-19/COVID19CountyMonitoringOverview.aspx.

As always, the Labor and Employment attorneys at Weintraub Tobin continue to wish you and yours health and safety during these challenging times.  If we can assist you with your employment law needs, please feel free to reach out to any one of us.

DOL Issues Guidance on FFCRA as Schools Reopen

On August 27, 2020, the U.S. Department of Labor (DOL) published three new “Return to School” FAQs providing guidance for employers and employees as schools reopen across the country. Specifically, the DOL clarified when employees may be eligible for leave under the federal Families First Coronavirus Response Act (FFCRA).

As a reminder, under the FFCRA, job-protected leave must be provided to some employees in order to care for a child whose school or place of care is closed, or childcare provider is unavailable, due to the coronavirus. The newest FAQs address issues employers and employees are facing as schools reopen both virtually, as well as on a “hybrid” model. The DOL further provides guidance on situations where schools have reopened, but the parent chooses a virtual model for their child’s learning.

Scenario 1: School Remains Fully Remote

Many schools across the country (and most in California) are currently only offering remote learning. In FAQ 100, the DOL confirmed that parents are permitted to take paid leave under the FFCRA for as long as the school remains closed to in-person learning.

Scenario 2: School Reopens on a Hybrid Model

Under a hybrid model, a school is typically open, but students alternate between in-person and remote learning. Under FAQ 98, the DOL clarifies that parents are eligible to take paid leave under the FFCRA on days where the child is not permitted to attend school in person, and must instead engage in remote learning. FFCRA leave is not available, however, at times when the child is able to attend school in-person.

Scenario 3: School Reopens, but Parent Chooses Remote Option

Most schools offering in-person learning are also providing a virtual option for parents who are concerned about their child returning to school. The DOL clarifies in FAQ 99 that FFCRA leave is not available to take care of a child whose school is open for in-person attendance. It is worth noting, however, that if the child is under a quarantine order or has been advised by a health care provider to self-isolate or self-quarantine, paid leave might otherwise be available.

The full FAQ’s can be found here (https://www.dol.gov/agencies/whd/pandemic/ffcra-questions). If you have questions as to whether FFCRA applies to you and your employees, and whether paid leave might be available, please contact your Weintraub Tobin labor and employment attorney for help.

Employers Must Use Reasonable Diligence to Track Telecommuting Employee Hours

With 31% (or more) of American workers working from home as of April 2020, according to a survey cited by the Bureau of Labor Statistics, and probably even more since then, most employers face important questions: what is the obligation to keep track of employees’ active work time and pay them for it?  On August 24, 2020, the United States Department of Labor (DOL) issued a “field assistance bulletin” to assist employers in understanding their obligations to monitor employees’ hours, and pay them for all hours worked.

The DOL is the federal agency that enforces the federal Fair Labor Standards Act (FLSA).  The FLSA (and California state law) requires that employers pay employees for all hours worked, including overtime.  This includes work that is not pre-authorized: “Work not requested but suffered or permitted is work time” and must be paid.  (29 C.F.R. § 785.11; Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004.)

This concept applies equally to telework performed at the employee’s home. (Id. § 785.12.) “If the employer knows or has reason to believe that the work is being performed, [the employer] must count the time as hours worked.” (Id.)

Employees who are properly classified as exempt from the FLSA (and California’s Industrial Wage Orders) are paid on a salary basis, regardless of the number of hours or work schedule.  But, employees who do not meet all of the criteria for an exemption (job duties, hourly rate, and basis of pay) must be paid for every hour worked, including overtime.

The DOL’s interpretive rules state that “[e]mployers are required to exercise control to ensure that work is not performed that they do not wish to be performed.” (Id. § 785.13.)  For example, a manager who schedules weekly conference calls with telecommuting employees (especially those in other time zones) should be mindful of the employees’ work hours.  Employees’ participation in conference calls outside of work hours is implicitly authorized, and if employees do not report the time spent on these calls, the employer has constructive knowledge of, and must compensate, overtime work.

The law does not require an employer to pay for work “it did not know about, and had no reason to know about.” (Kellar v. Summit Seating Inc., 664 F.3d 169, 177 (7th Cir. 2011) (emphasis added).)  In the language of the statute, the employer could not have “suffered or permitted” work it did not know and had no reason to believe was being performed. (See 29 C.F.R. §§ 785.11–.12.)  An employer is not obligated to police employees, and when employees are clocked out, this creates a presumption they are doing no work – but the presumption can be rebutted by evidence that the employer knew or should have known work was being performed. (Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, 1040, 1051.)

In sum, failing to pay for unreported work that the employer did not authorize and has no way of knowing was being done would not violate the law, but if an employer knows about the work, even if they didn’t ask for it to be done, they must pay for the work.

Violations of the FLSA and state wage orders can result in civil penalties, statutory penalties, and attorneys’ fees and costs.  To avoid liability for wage and hour violations, employers must use reasonable diligence to determine when work is being performed, and take reasonable measures to prevent unwanted work.

When does an employer have “reason to believe” work is being performed?

An employer must pay for work if it has actual or “constructive” knowledge that work is being performed.  The DOL makes clear that it is not enough to merely have a policy prohibiting unauthorized work.

For example, if a supervisor emails an employee after hours and the employee responds after hours, the employer has actual knowledge of work being performed.

Likewise, if a project is assigned by a supervisor at the end of a workday, does not set a clear expectation that the employee should wait until the next workday to perform the task, and the project is turned in before the start of the next shift, the employer would have constructive knowledge of the employee’s after-hours work – and would be obligated to confirm that the employee properly logged their after-hours work time.

In this era of remote access, it is theoretically possible for employers to use tracking software on employer devices, monitor remote login times, review phone or data use records, etc., and then cross reference those times to employees’ time sheets.  While those tools could be helpful in situations where the employer otherwise has reason to believe an employee performed after-hours work that did not get reported, the DOL makes clear that the onerous burden of sorting through all of this data for every employee every work day, and comparing it to timesheets, is not required.

How can an employer manage this obligation from a practical perspective?

An employer may satisfy its “reasonable diligence” obligation to acquire knowledge regarding employees’ unscheduled hours of work, by establishing a reasonable process for an employee to report unpaid work time.

Creating a reasonable reporting system – and making sure employees are not discouraged or prevented from using the system – has been found to satisfy this obligation.  For example, employers’ timekeeping software should allow employees to enter their actual work time (not just a pre-set scheduled start and end time).

Today’s timekeeping software may have features to allow employees to clock in and out multiple times per day, or to allow an employee to go back in and correct a time entry even if it is outside of the scheduled shift time, and/or to sign off on a verification when a timesheet is submitted at the end of a pay period.  Or, employers may provide employees with a form to submit time sheet corrections, or have a written policy that encourages employees to review their timesheets and email their supervisor and payroll to submit any corrections each pay period.

In addition, employers may have the ability to limit nonexempt employees’ after-hours access to company software.

How does an employer prevent employees from working more hours than authorized?

Employers should have a written policy that requires employees to accurately record all hours worked, stating that they should seek approval for working overtime, and forbidding unauthorized overtime or work outside of scheduled hours (including emailing, texting, and using work instant messaging software).  The policy should state the consequences: violators will be paid for the hours they worked, but can be disciplined, and even fired, for violating the policy.  Swift and consistent enforcement of these policies should quickly curb repeat violations.

But, even with such a policy, employers should train supervisors to ensure that they do not discourage employees from recording all hours worked or encourage them to work off the clock.

If you have questions about best practices or California or federal wage and hour laws, please contact your Weintraub labor and employment attorney.