Temporary Worker News
California Labor Paid Sick Leave Laws Clarified, Still Complicated
In sum, The Healthy Workplaces, Healthy Families Act of 2014 (AB 1522) was signed into law by Governor Jerry Brown last year for a planned two-stage implementation at the beginning of 2015. Various changes to record keeping and the posting of notices were brought in at the first of the year, followed by the implementation of changes to accruals and reporting on July 1.
The aforementioned changes to the California labor code were part of the original adoption of AB 1522. However, employers found the rollout somewhat overwhelming, requiring an update to AB 1522 in an effort to straighten out some of the confusion.
That update came in the form of AB 304, a bill that Governor Brown swiftly signed into law on July 14 and is effective immediately. The amendments provide some clarification with regard to compliance over payments, provisions for time off and so on. The clarifications are important not only for the employer - in order to properly comply - but also the employee, for whom a basic understanding of the new provisions is important in order to identify whether or not an employer is properly conforming to the new guidelines.
One of the clarifications with regard to California and labor law stemming from the quick passage of AB 304 has to do with record keeping: while an employer can know the reason(s) and purposes for which an employee uses paid sick time, there is no requirement in record-keeping protocols for maintaining documentation to that end.
Were an employer to maintain documentation with regard to the purposes for paid sick leave, or were an employee to find himself getting stiffed on sick pay and sick leave, he needs to be able to identify incidents of noncompliance in order to initiate and pursue a California labor lawsuit, as required.
AB 304 clarifies protocols for calculating paid sick leave, and the employer now has two options for doing so: 1) a calculation formula akin to the regular rate of pay for overtime calculation for the workweek in which paid sick time is used, and 2) the original calculation protocol dividing the employee’s total wages, not including overtime premium pay, by the employee’s total hours worked in the full pay periods of the prior 90 days of employment.
The July 14th amendment also provides for alternate accrual methods beyond the formula of one hour for each 30 hours worked, provided the accrual is on a regular basis and the employee will have 24 hours of paid sick leave available by the 120th calendar day of employment.
There is also clarification, for the purposes of California labor employment law, with regard to the right an employer has in limiting an employee’s use of paid sick days to 24 hours or 3 days either: (1) in each year of employment (by anniversary year, for example); or (2) in each calendar year; or (3) in any specified 12-month period.
Among other provisions in AB 304 is clarification over the requirement that an employee, to be eligible for paid sick leave, must be in a position to have worked for the same employer for 30 days, as opposed to simply working for any employer in the state of California.
There is a somewhat complicated grandfather clause for those employees who were provided paid sick leave or paid time off prior to the implementation of AB 1522 at the first of the year, and for whom a different method for accruing sick time may have been used. This clause allows for a more gradual accrual, provided the employee accrues eight hours of paid sick leave in the first three months of employment and was eligible to earn 24 hours of sick leave or paid time off within nine months of employment.
At the end of the day, California state labor laws are intended to level the playing field and provide fairness for the employee. A mutual understanding of California employee labor law is an important prerequisite for the employer to properly implement new laws, and for the employee to understand when those statutes are being accidentally or purposefully circumvented…
Respecting Caitlin Jenner and Her Community Under the Law
For some time now, California labor law has protected transgendered individuals from discrimination and harassment. However, a decision by the Superior Court of California, County of Sacramento last spring held that denying transgender employees the right to use gender-identity appropriate facilities remains a violation of the state’s anti-discrimination laws, and other statutes entrenched in the California Labor Code.
That decision, released in March of 2014, held that transgendered employees in the state of California have the right to use gender-identity appropriate change room and washroom facilities in the state of California. Various other states have enacted similar updates to their laws.
Now, the Feds have finally entered the pool with an update to federal codes that mirror California and labor law, as well as similar laws in other jurisdictions related to transgendered individuals.
To that end, the Occupational Safety and Health Administration (OSHA) on June 1 published A Guide to Restroom Access for Transgender Workers.
“The core principle is that all employees, including transgender employees, should have access to restrooms that correspond to their gender identity,” said Assistant Secretary of Labor for Occupational Safety and Health Dr. David Michaels, in a released statement. “OSHA’s goal is to assure that employers provide a safe and healthful working environment for all employees.”
The guide itself is detailed, but in sum, the rule is stated simply thus: if a female has transgendered, either emotionally or physically (or both) to male and therefore identifies as male, then that individual has the right and freedom to use the men’s washroom.
The same holds true for Bruce Jenner, who now identifies as Caitlin. It wasn’t that long ago that Jenner was being interviewed on national television about his story and his ongoing transition to female, the gender to which Jenner now identifies. This week, the release of the Caitlin Jenner photo shoot for the cover of Vanity Fair is a stark representation of what Jenner was revealing just a few weeks ago.
Therefore, applying the Bruce Jenner/Caitlin Jenner example to the rule of law, Bruce Jenner identifies as female now (as Caitlin Jenner) and thus, has the right to use the women’s washroom.
The OSHA guide, and the corresponding law, is founded upon the core belief that all employees in the workplace should be permitted, without retaliation, use of the facility that best matches his or her gender identification. At the end of the day, however, the OSHA guide notes that the employee should determine “the most appropriate and safest option for him - or herself.”
OSHA also identifies best polices that provide additional options that transgendered employees may choose, but are at the same time not a requirement. Such options, as available, could include: “Single-occupancy gender-neutral (unisex) facilities, and: Use of multiple-occupant, gender-neutral restroom facilities with lockable single occupant stalls.
“Under these best practices, employees are not asked to provide any medical or legal documentation of their gender identity in order to have access to gender-appropriate facilities,” states the guideline. “In addition, no employee should be required to use a segregated facility apart from other employees because of their gender identity or transgender status. Under OSHA standards, employees generally may not be limited to using facilities that are an unreasonable distance or travel time from the employee’s worksite.”
The guidelines also speak to the existence of local and state laws and statutes, such as California labor employment law, about which all employees should be conversant.
To summarize, transgendering has long passed the signpost of sensationalism. Rather, gender identification in any form has progressed from tolerance to widespread acceptance; and yet another indication of this is the release, this summer, of Becoming Us, an unscripted “docuseries” on ABC Family, documenting the life of 17-year-old Ben Lehwald of Evanston, Illinois. In the series, which is produced by Ryan Seacrest Productions, Ben’s father Charlie transitions to Carly. The narrative is told from Ben’s perspective as he watches his dad go through his divorce from Ben’s mom Suzy, before undergoing gender reassignment surgery.
In the grand scheme of things, washroom assignment (or reassignment) should be the least of a transgendered individual’s worries. Nonetheless, it is an issue that many states have been grappling with for some time - including California and labor law observed by the state. Now, the Department of Labor through the OSHA guideline will ensure that the rights of everyone are quite properly observed and respected behind the washroom stall.
Caitlin Jenner will use the women’s washroom. It’s only appropriate. And it’s also the law.
Summer Intern? Maybe You Should Be Getting Paid
California Labor Law Protection for Discrimination and Retaliation?
Many people are afraid to file a complaint. Perhaps they will be singled out for something at a later date, even if it isn’t their fault. Perhaps they will be passed over for a promotion. And maybe they will get so worn down and so stressed out that the only option is to quit.
Juan has been working just over a year in shipping and receiving for a large warehouse. He also trains employees. Juan was hired through a temp agency a few months before the new General Manager was hired.
“My first year anniversary came up and I did the mandatory drug test along with other applicants - the same tests that the new GM had to do,” says Juan. “The difference between us is that he passed the background checks and tests and I failed, according to our branch manager. That was really weird because just before I started with this company I applied as a County Sheriff and passed everything except for a physical test. So why can I pass the County test but not pass the test for this company?”
Juan believes it is because he is Hispanic. The new GM is African American and so is the boss. Juan says that Hispanic employees are constantly harassed and belittled.
“My wife is scheduled to have a caesarean section next month so I applied for one-day leave,” Juan says. “I asked our department head and he said okay, just make sure the branch manager and warehouse manager know. When I told Harvey, the warehouse manager, he screamed at me because I ‘went over his head.’ We have an open-door policy so I have no idea why he got so upset, except to single me out.
“The next day I inadvertently got an e-mail from the branch manager that was supposed to be sent to Harvey. It said ‘Juan needs to clear the c-section with the temp agency and we need to approve or replace the employee since he is a temp.’
“But the agency already knows what is going on and they approved my day off. Now I am afraid they are going to try to find some excuse to fire me. This is so stressful and I have a baby on the way.”
Juan saved the e-mail. And he told his contact at the temp agency that he was being discriminated against. She was shocked and disgusted with the e-mail and asked Juan why she wasn’t told sooner. “I told her that I am afraid of retaliation, just like the other Hispanic employees here,” Juan explains. “I told her that only one person out of three sent here from the temp agency last month was hired - he is Harvey’s friend.
“This company is run like a frat house: If you don’t belong to Harvey’s church or know him personally, he will treat you like you are nothing. From what I heard this has happened to many employees over the years but they too are afraid of retaliation. I was told that some people did complain but he made things difficult for them, such as assign lousy hours or a shift he knows will be difficult to juggle with their personal life, just to show that he is the boss.”
Juan is hopeful that an attorney experienced with the California labor law can advise him whether or not to proceed with a California labor lawsuit. He is too afraid to call the Retaliation Complaint Unit.
California Assembly Bill Protecting Temporary Workers Takes Effect
In September 2014, California Governor Jerry Brown signed Assembly Bill 1897 into law. That bill became effective as of January 1, 2015. The bill is designed to address significant issues in warehousing and other industries that typically outsource their employment to temp agencies and staffing firms. Outsourcing their employment can save companies money on wages - because such arrangements usually result in lower-paying jobs - and the companies can also claim they are not responsible for low pay given to employees.
Employees who are hired by the temp agencies and outsourced then find themselves in a difficult position. Claims for failure to pay minimum wage filed against the staffing agencies often result in a battle between the company that hired the agency and the agency itself. The agency can argue that the larger company had firm control over the wages it offered, while the larger company argues it had no knowledge of the staffing firm’s labor code violations, including low pay. In the meantime, the employee is left without proper pay and terrible working conditions.
“This bill would require a client employer to share with a labor contractor all civil legal responsibility and civil liability for all workers supplied by that labor contractor for the payment of wages and the failure to obtain valid workers’ compensation coverage,” AB 1897 states. Prior to the bill, it was only illegal for a person or company to enter into a contract with a temp agency or staffing firm if the company or person knew that the contract would not provide sufficient funds to ensure employees were properly paid.
What this means for employees is that if they are hired by a staffing agency or temp firm and contracted to another company, and if they are not paid at least the legally mandated minimum wage, they may be able to file a lawsuit not only against the staffing agency that hired them but also against the company they were contracted to. It also means the state can go after larger companies when the staffing agencies they contract employment to violate the law.
California Passes New Labor Law
As of September 28, Assembly Bill 1897 makes client employers responsible when subcontracted agencies violate California labor laws by underpaying their workers, according to The Huffington Post (9/29/14). In other words, if a large company uses a temp agency for staff and the temp agency underpays the workers, the company that hired the temp agency can also be held responsible, and may face fines.
Although temp jobs are often thought of in terms of office personnel, frequently temp workers are used to staff warehouses and food processing plants. These employees may be subject to labor violations including not receiving proper meal and rest breaks, not being paid minimum wage and not being paid overtime. They may also face harsh working conditions and safety hazards.
Large companies do so to keep their costs down because temporary workers tend to cost less than permanent employees. Assembly Bill 1897 does not shift full responsibility for labor violations to the hiring company but requires the hiring company to share liability with the contractor.
This means that the larger companies that staff using outsourcing cannot claim ignorance when their employees are paid less than the minimum wage. It also protects temp workers from filing suit against a temp agency that might, when faced with a suit, declare bankruptcy to avoid paying workers.
“This bill would require a client employer to share with a labor contractor all civil legal responsibility and civil liability for all workers supplied by that labor contractor for the payment of wages and the failure to obtain valid workers’ compensation coverage,” according to the Legislative Counsel's Digest.
The bill defines the client employer as “the business entity that obtains or is provided workers to perform labor within the usual course of business from a labor contractor, except as specified.”
Earlier in September, Governor Brown also signed into law a bill that requires California employers to provide three paid sick days a year, making California only the second state in the US to require sick leave for employees. According to The Sacramento Bee (8/30/14), the sick leave bill does not include in-home caregivers.
Exotic Dancers Bring California Labor Lawsuit
The San Jose Mercery News (4/30/14) reports that 11 former dancers at the Pink Poodle strip club filed a lawsuit alleging that they were treated as independent contractors instead of employees and were not paid minimum wage or overtime. Furthermore, because they were classified as independent contractors, they were not eligible for employee benefits. The lawsuit also alleges that some women were forced to pay the club so they could dance there and were threatened with retaliation if they complained.
The lawsuit was filed in Santa Clara County Superior Court, according to CBS San Francisco (5/1/14). The defendants are reportedly the Kuzinich family, owners of the Pink Poodle.
Lawsuits have been filed by dancers across the country alleging the owners of various strip clubs have failed to pay their dancers minimum wage or overtime, in violation of various labor laws. In 2012, a club in California settled a similar lawsuit for $12.9 million, according to Time (1/15/14). In 2013, dancers from the Penthouse Executive Club settled their lawsuit with the club for $8 million. They also alleged unpaid wages.
Also in 2013, a lawsuit was filed by Felicia Harmon and others against Foxy Lady, Inc. and Arthur Dillard alleging that not only did Foxy Lady not pay its dancers minimum wage and overtime, it did not pay dancers wages at all and forced the plaintiffs to pay to work at the Foxy Lady. The lawsuit (case number 1:13-CV-3517-TWT, in the Northern District of Georgia Atlanta Division) seeks to represent current and former employees of Foxy Lady.
Court documents allege that despite having specific work schedules, specific times and manners for dancing, regulations for attire and set prices for dances, the Foxy Lady classified all its entertainers as independent contractors. The plaintiffs say they were also required to pay a “bar fee” so they could work any given shift and were charged fines or fees for being late for work or violating any of the Foxy Lady’s rules. The lawsuit further alleges that the entertainers were required to attend mandatory meetings but were not paid for being at those meetings.
With so many dancers filing lawsuits alleging they have been misclassified as independent contractors, a federal judge ruled that dancers at Rick’s Cabaret in New York should be paid minimum wage and were improperly classified as independent contractors even though they should have been classified as employees, ABC News reported (9/12/13). That lawsuit was filed in 2009.
The Pink Poodle lawsuit is Coleman et al vs Pink Poodle Enterprises et al, case number 114CV264315.
California Labor Law Gets New Look for New Year
Critics suggest that a boost to the minimum wage - currently $8.00 per hour until the end of June - will only result in higher prices and higher costs, effectively voiding their windfall. And industry watchers maintain there will always be those employers who attempt to grow their own coffers on the backs of their workers, by skirting around various tenets of California labor code, including overtime exemptions.
Still, advocates for workers’ rights hail the changes, which mostly took effect January 1, as a continuing step - but baby steps, all - in the right direction.
According to The Californian (1/1/14), the minimum wage for the state will rise to $9 per hour effective July 1 this year. The hourly minimum, according to California and labor law, further rises to $10 January 1, 2016.
But there are a number of other updates to California and labor law that went into effect the first of the year. Among them, is a law that prevents employers from threatening to report workers who complain about legitimate job-related concerns and seek payment of legally due wages to immigration authorities. Such has been the case in the past when an employee, seeking legally due wages and getting nowhere with the employer, files a California labor lawsuit.
The new provisions to California labor employment law also provides that certain in-home workers, such as nannies and personal attendants for individuals who are ill, disabled or elderly, will now qualify for overtime - and will now be governed by a bill of rights.
California employee labor law also prohibits employers from forcing seasonal employees, or other employees who work outdoors, to continue working during mandated “recovery periods” in an effort to avoid debilitating or deadly sunstroke.
Victims of crime will also be allowed time off from work to appear, as needed, as part of court proceedings involving violent crime, domestic violence or sexual assault, among others.
The change to California prevailing wage law is by far getting the most traction in the press.
“We were able to improve upon existing protections as well as support workers in a number of new ways, including increasing the minimum wage,” said Steve Smith, a spokesman for the California Labor Federation, in comments featured in The Californian on New Year’s Day. “If you look at this year, compared to over the past decade, it would be hard to argue that there’s been a better year for worker legislation.”
Governor Jerry Brown appears poised to continue to push improvements, as he is able, through California state labor laws.
ERISA Not Just About Protecting Investments
employee stock plans, the truth is that ERISA covers much more than retirement plans. Included in ERISA benefits are insurance provided through an employer, meaning that any claims about employer-provided insurance are covered by ERISA.
Covered by the Employee Retirement Income Security Act of 1974 (ERISA) are retirement, health, life insurance, and disability insurance plans. Covering only private employers, ERISA does not require employers to provide health insurance or other benefits plans; it simply sets out rules for when employers choose to offer such benefits. If employers choose not to offer benefits as covered by ERISA, they are not governed by ERISA rules. Furthermore, ERISA does not cover insurance policies that are purchased privately. It only covers those provided by an employer.
Under ERISA, those in charge of health plans and other benefits must provide information about the plan's funding and features, must abide by their fiduciary responsibilities and must provide an appeals process for people who have a grievance with their plans. Finally, ERISA gives participants the right to sue plan fiduciaries in cases where there is a breach of fiduciary duty.
Before a lawsuit can be filed, however, under ERISA the claimant must exhaust administrative remedies before filing a lawsuit. This means that if the insurance company has an internal appeals process, the claimant must file an appeal before filing a lawsuit, if the insurance policy in question is provided by the employer (private insurance, because it is not covered by ERISA, does not have such a requirement and a lawsuit can be filed once the first denial is received.)
Many insurance companies have rules for filing appeals, including a set time in which to file. Certain medical records and an appeal letter may also be required. If that appeal is then denied, a lawsuit can be filed to enforce the claimant's rights. A plan beneficiary or participant can file the lawsuit, depending on the circumstances, and the lawsuit is typically filed against the plan fiduciary or administrator.
It is important to note that under ERISA a claimant will not be awarded punitive damages; all that can be claimed are costs associated with the insurance policy.
California Labor Law and Misclassification with the IRS
There are many temptations for businesses to classify workers as independent contractors instead of employees. Emma says the main reasons are the following:
• to shift the cost of employment taxes to workers,
• to avoid paying employee benefit costs, and
• to eliminate responsibilities under employment laws, such as civil rights or wage and hour laws.
"However, employers who are determined to have misclassified their workers as independent contractors risk drastic tax liabilities to the IRS, among other potential liabilities, penalties and costs," warns Emma. "Worker classification is a high-stakes decision that affects all industries. The IRS and courts have found workers to be employees in job positions ranging from software engineer to truck driver and from real estate loan officer to exotic dancer."
The IRS recently stepped up employment tax audits in an attempt to close the tax gap, including audits in California, and one of the areas targeted for review is the classification of workers as independent contractors instead of employees. If your business uses independent contractors, you should consult with an employment attorney to evaluate your exposure.
Emma says that the IRS can determine whether your independent contractors are employees and demand unpaid employment taxes, so it's advisable that you examine how you have classified your workers sooner than later.
The IRS method for distinguishing between independent contractors and employees is complicated??"again, an attorney can help you navigate both the IRS "test" and the California labor code. Emma explains that the IRS considers a multi-factor test based on how much control the employer exerts over the worker. "The multi-factor test is broken down into three general categories: (1) Financial Control, (2) Behavioral Control, and (3) Type of Relationship. The factors include, among other things:
• the extent of instructions provided to the worker
• the extent of training provided to the worker
• the extent to which the worker has unreimbursed expenses
• the extent of the worker's investment
• the extent to which the worker makes services available to the relevant market
• how the business pays the worker
• the extent to which the worker can realize a profit or loss
• written contracts describing the relationship the parties intended to create
• whether the business provides the worker with employee-type benefits, such as insurance, a pension plan, vacation pay, or sick pay
• the permanency of the relationship
• the extent to which services performed by the worker are a key aspect of the regular business of the company
The test is applied on a case-by-case basis. Businesses that misclassify their workforce are subject to retroactive tax withholding, penalties and interest," says Emma, who adds that all hope is not lost if your business is audited and a tax examiner determines your workers are misclassified. "You may contest the finding and seek relief under the safe harbor provided by Revenue Code Section 530."
The Section 530 Safe Harbor
"If your business has been consistent in treating workers as independent contractors and has a reasonable basis for doing so, you may be eligible for 'safe harbor' relief under Section 530 of the Revenue Act of 1978," says Emma. "For employment tax purposes, a business may treat an individual as an independent contractor rather than an employee if:
• The business does not treat any other individual holding a substantially similar position as an employee for purposes of employment taxes for any period; and
• All required Federal tax returns are filed by the business on a basis consistent with its treatment of the individual as an independent contractor (e.g., using Form 1099); and
• The business has a 'reasonable basis' for not treating the individual as an employee."
IMPORTANT NOTE: Section 530 provides relief from payment federal employment taxes only but not, for example, lawsuits from workers.
Increasingly, worker classification is garnering more attention in the state of California. Many state officials are facing record budget deficits so they are starting to aggressively pursue companies that try to pass off regular employees as independent contractors. "Well-intentioned businesses will continue to get caught in the crossfire," says Emma, "and the financial exposure can be drastic."
If your business uses independent contractors, you should consult with an attorney to conduct an audit and evaluate your exposure.
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