| Blog - 2010 blogs |
| Written by Jason Erlich |
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Although many employees are paid a salary each month or bi-weekly, California’s wage and hour law makes a distinction between “exempt” and “non-exempt” employees, not salaried versus hourly. Most of the protections afforded employees under California’s wage orders do not apply to “exempt” employees and they are not entitled to overtime pay, reporting time pay, and meal and rest periods. The largest group of exempt employees is executive, administrative and professional employees (sometimes referred to as “white collar” employees). This article will focus on general overview of the exemption requirements with an emphasis on the executive exemption, and subsequent articles will focus on the professional and administrative exemptions.
The burden is on the employer to prove an exemption and an employer must satisfy both prongs of a two-part test – the “salary basis” and the “duties” test. The “salary basis” test merely requires the employee to earn a salary equivalent to twice the minimum wage for full-time employment (equivalent to a 40 hour workweek). Since January 1, 2008, this means a salary equal to $640 per week or $33,280 per year.
The “duties” test requires that an employee spend at least half of his work time performing exempt tasks. The executive exemption also requires that the employee “customarily and regularly exercise discretion and independent judgment” over “matters of significance.” These legal buzzwords are quite contentious in lawsuits, but essentially mean that the employee has authority to choose among various options available to him, selects the best choice, the decisions are important to the business, and the employee makes these decisions on a regular basis.
For the executive exemption to apply, the employer must show that the employee performs all of the following duties:
• manages the business or a department within the business;
• customarily and regularly exercises discretion and independent judgment as noted above;
• customarily and regularly directs the work of two or more employees;
• the employee has real input in the hiring/firing process; and
• the employee spends more than half of their work time performing exempt managerial and supervisorial duties
The executive exemption is one of the most contested exemptions in California wage and hour law and can be quite confusing to understand. If you believe that you are misclassified as an exempt employee, but do not meet the above salary or duties test, I would urge you to contact an attorney to discuss your situation as soon as possible. |
| Blog - 2010 blogs |
| Written by Jason Erlich |
In California non-exempt employees must be “provided” a 30-minute meal period for ever five hours worked. Employees who work ten hours or more in a workday must be provided with two 30-minute meal periods. However, there are exceptions: (1) if the employee works six hours or less and consents in writing to waive the meal period; or (2) if the employee works less than twelve hours and the employee actually takes the first meal break, then the employee can waive the second meal period. Employers are not required to pay employees for any meal period.
California courts have not agreed on the exact meaning of the word “provide.” One court has held that an employer has an “affirmative obligation to ensure that workers are actually relieved of all duty” during their meal period. Another group of courts held that employers need not require that employees take meal breaks as long as they are allowed to take them. (The issue is now before the California Supreme Court for clarification.)
Nonetheless, if an employer fails to relieve a non-exempt employee of all duties or does not permit the employee to leave the premises during a meal period, then it is considered an “on duty” meal period. For each missed meal period, the employer must pay the employee one additional hour of pay at the employee’s regular pay rate. This meal period pay is capped at one hour of pay for each workday (even if the employee was not given the second meal period). Employees generally have a private right of action to recover meal period pay, and the statute of limitations for recovering pay for a missed meal periods is three years. |
| Blog - 2010 blogs |
| Written by Jason Erlich |
There is no federal or California law that requires employers to pay “severance” pay to employees who resign or are terminated. However, some employees may be offered severance pay – sometimes because the employer wants to “buy peace” to avoid a potential lawsuit and other times because the employer is required by union contract, severance pay plan, or other legal document to offer severance. Severance pay is usually offered only in exchange for a release of any potential claims against the employer, and the “release agreement” is a legally binding contract.
The newly unemployed may encounter some issues when applying for unemployment insurance benefits if they have received severance pay. In general, severance pay is usually not considered “wages” and thus the employee may begin collecting unemployment benefits after the initial waiting period.
However, if the employer terminates the employee, but continues to pay their wages, these payments may be considered “in-lieu-of-notice” or “wage continuation” pay. In these situations, the employee will not receive unemployment benefits for the period covered by the payments. The California Employment Development Department (EDD) considers several factors in determining if the payment is severance pay including whether: (1) a company policy or plan allows for severance pay; (2) the company policy indicates that specific reasons trigger the severance pay (e.g. job elimination, reduction in force); (3) the payments are available to a class of employees (although not necessarily all employees); and (4) plan does not state the purpose for the payment. If the payment is made in a lump sum, it will almost certainly be considered severance pay and will not reduce the employee’s benefits.
On the other hand, when an employee is kept on the payroll after termination, receives paychecks on the regular payday, and continues to accrue benefits (e.g. vacation or sick time), the payments may be considered “wage continuation pay” or “in-lieu-of-notice pay” which would delay employee’s entitlement to benefits. It is important to recognize that the label given the payments does not affect the EDD’s determination.
Since these distinctions are not always clear, employees should not wait to apply for unemployment benefits merely because they are kept on their employer’s payroll and continue to receive payments after termination. |
| Blog - 2010 blogs |
| Written by Jason Erlich |
California’s Pregnancy Disability Leave (PDL) law allows pregnant women who are “disabled” during their pregnancy to take up to four months of leave from work. The term, disabled, is a bit misleading because it includes any disability related to the woman’s pregnancy, childbirth, or a related medical condition.
Further, even prior to taking time off, employer’s are also obligated to make reasonable accommodations for pregnant employees such as modifying work duties, transferring the employee to a less strenuous position, or providing a modified work schedule. An employer’s failure to accommodate the pregnant employee is only excusable where the employer can prove that the accommodation would be an undue burden.
To qualify for leave, the employee must be unable to perform one or more of her job functions because of the pregnancy or pregnancy-related conditions such as morning sickness or prenatal care. An employee generally must request pregnancy disability leave at least 30 days’ prior to the need for leave. However, if circumstances do not permit advance notice, the employee only need give notice as soon as practicable. In response, an employer is permitted to request medical documentation supporting the employee’s need for leave. The certification simply must show the date of disability, the anticipated amount of leave needed, and an explanation as to why the employee cannot work.
After the leave is complete, the employer must return to the employee to the same or to comparable position. Pregnancy leave must be treated the same as all other temporary disabilities so that policies that apply to non-pregnancy-related temporary disabilities must also apply to leave taken under the PDL. For example, pregnant employees continue to accrue seniority, have a right to participate in health, retirement, and disability plans, and any other benefits provided to employees.
In addition to leave under the PDL, California employees who work for larger employers (those who employ 50 or more employees) are entitled to an additional 12 weeks of leave under CFRA. In total, a pregnant employee may be able to maximize her leave to allow for nearly 7 months of job protected leave. |
| Blog - 2010 blogs |
| Written by Jason Erlich |
The federal Family and Medical Leave Act (FMLA) and the California Family Rights Act (CFRA) both allow eligible employees to take up to 12 weeks per calendar year of unpaid leave. The employee can take the leave intermittently and may use sick, vacation, or accrued PTO to continue receiving income while on leave. FMLA/CFRA leave is considered “job protected” leave, meaning that once the FMLA/CFRA leave concludes, the employee must be returned to either the same job position or to a comparable position. After the 12 week period expires, the employer has no obligation to reinstate the employee.
FMLA/CFRA leave allows an employee to take leave from work because of (1) the employee’s serious health condition, (2) to care for an immediate family member (spouse, child, parent, or, in California, domestic partner) who has a serious health condition, or (3) for the birth or adoption of a child or for the foster care placement of a child.
FMLA/CFRA leave does not apply to all employees however. The first hurdle is the requirement that the employer regularly employs 50 or more part- or full-time employees within a 75 mile radius. Additionally, the employee must have been employed for a total of 12 months and have worked 1,250 hours in the year before the date in which FMLA/CFRA leave is sought.
Generally, an employee is required to provide his or her employer with at least 30-days advance notice of the need of FMLA/CFRA leave. However, if the need for leave is unexpected, the employee only needs to notify the employer as soon as is practicable. Notice to the employer can be given either verbally or in a written document, and should include the timing of the leave and its anticipated duration. The employer is required to respond to a request for leave within 10 days and may request proof of the need for leave, including supporting medical documentation. Failure to provide notice to the employer may result in the employer successfully claiming that the employee’s absence was unexcused and therefore not protected by FMLA/CFRA. |
| Blog - 2010 blogs |
| Written by Jason Erlich |
In general, California does not require employers to provide paid sick leave to their employees nor are employers obligated to give employees unpaid sick leave. Also, even if sick leave is provided, California labor law does not treat the leave as “wages” that must be paid out upon employment separation. Accordingly, employers may institute a “use or lose it” sick leave policy setting limits on the amount of sick leave. The exception is employees working within San Francisco city limits.
Sick leave at its most basic level allows an employee to take time off for the employee’s illness, injury or medical condition; obtaining professional diagnosis or treatment; or for other medical reasons. If sick leave is offered, then employers are required to comply with California’s kin care law, Labor Code § 233. Under this law, employers must allow employees to use “accrued and available sick leave” to care for family members such as children, parents, a spouse, domestic partner, or child of a domestic partner. Employees may use up to one half of their accrued sick leave to care for family members.
In McCarther v. Pacific Telesis Group, the California Supreme Court determined that California’s kin care law “does not apply to any and all forms of compensated time off for illness,” but applied solely to sick leave defined in the statute. In that case, the employer provided for sick leave at full pay for up to five consecutive days in a seven-day period and did not provide a cap on the amount of paid sick leave available to its employees. So long as an employee returned from his or her sick leave, the employee could take additional sick leave in five-day increments for an indefinite period. The employer, however, did not provide paid sick leave for absences to take care of family members.
The Supreme Court concluded that unlimited or uncapped offers of sick leave to employers did not fall within section 233’s meaning of “sick leave.” Since California Labor Code § 233 defines sick leave as “accrued incremented of compensated leave,” the Court concluded that the statute language was “limited to employers that provided a measurable, banked amount of sick leave.” Accordingly, since unlimited sick leave policies do not accrue and are not “banked,” they are not covered by California’s kin care law. |
| Blog - 2010 blogs |
| Written by Jason Erlich |
Recently I had a series of inquires about the role of religion in the workplace – is an employer required to give employees time off for an important religious holiday? And, does a company’s web posting stating that its business ethics are guided by Christian beliefs discriminate against non-Christian candidates?
The landscape of religious discrimination and religious accommodation highlights the intersection of two trends in the American workplace – the desire for employees to practice their religious beliefs during work time and the need for employers to operate their business as they see fit.
To prove religious discrimination, whether protected by federal or California laws, requires an employee to demonstrate that (1) the employee has a bona fide religious belief which conflicts with their job duties, (2) the employee informed the employer of the conflict (or in California, the employer is aware of the religious beliefs), and (3) the employer took an adverse employment action because of the employee’s inability to fulfill the job duties required of them. Courts generally will defer to the employee’s claim of a strongly held religious belief so long as it is sincere and even if the particular religious practice is not actually a requirement of the employee’s religion.
A thornier situation arises when the employee seeks a reasonable accommodation to practice their religious beliefs. Employers are obligated to provide the accommodation so long as it does not cause an “undue hardship” – essentially a balance between the nature and cost of the accommodation with the employer’s overall financial resources and the impact on operation of the company’s business.
Courts have upheld employer’s claims of an “undue hardship” where, for example, the employer prohibited employees from proselytizing at work, the employer refused to alter its ‘no facial jewelry’ policy, or the employer prohibited employees from displaying certain religious symbols in the workplace. At the same time, courts have ruled against employer’s undue hardship claims where employees requested time off for religious holidays, shifting of schedules, temporary or permanent transfers, or providing break areas for religious practices. Further, employers cannot compel employees to observe religious practices which conflict with the employee’s own religious practices.
So in answering the question first presented above – does a private employer who openly advertises that their business ethics are informed by and based on Christian principles engage in a type of religious discrimination? The short answer is probably no. On the surface, an employer is free to seek out any individuals who believe in the nature of its business and who would be drawn to the strong Christian underpinnings of its owners. But in practice, the employer cannot inquire about the candidate’s religious beliefs, cannot use religion as a hiring litmus test, cannot refuse to hire prospective candidates because of the employee’s religious beliefs, and cannot require employees to conform to the employer’s religious beliefs. |
| Blog - 2010 blogs |
| Written by Jason Erlich |
Despite the acrimony surrounding President Obama’s signing of the Patient Protection and Affordable Care Act (better known as the health care bill), many of the most important provisions to bring health care to the uninsured – such as portability of benefits and coverage under “health care exchanges” – do not take effect until 2014.
For many workers who have lost their jobs and the healthcare benefits attached to the employment, the only viable healthcare option is COBRA, and in California, Cal-COBRA. Under COBRA (the acronym for the “Consolidated Omnibus Reconciliation Act”), former employees can continue their employer-sponsored healthcare coverage without a gap in coverage or being denied coverage for pre-existing conditions.
Healthcare coverage under COBRA still requires the individual to pay the full cost of the monthly premiums and out-of-pocket health care expenses. The cost, however, is based on the group rate available to the employer rather than the rate available for individual/family insurance, not to exceed 102% (federal) or 110% (California) of the regular premium for the first 18 months.
In the 2008 stimulus package, the federal government paid up to 65% of the insurance premium cost for 15 months. Unfortunately, the law expired on March 31, 2010, and currently bills are pending in both the House and Senate to renew the subsidy.
COBRA coverage is contingent on certain “qualifying events” such as a reduction in hours, divorce or separation of the covered employee, voluntary resignation, retirement, or generally any employment separation from the employer. The one exception is termination of employment for “gross misconduct” which includes any intentional, deliberate, extreme or outrageous act that “shocks the conscience.” The burden of establishing gross misconduct lies with the employer. If the employer chooses this argument, the former employee must be notified that COBRA coverage will be denied and must be afforded an opportunity to appeal the decision.
The length of coverage under COBRA varies according to the nature of the qualifying event. For termination of employment or reduction in hours, the period of coverage is 18 months. If the qualifying event was for reasons other than termination or reduction in hours, coverage can extend up to 36 months.
Despite being entitled to coverage, COBRA coverage is not guaranteed for the 18 months and may end earlier for several reasons, including failure to pay premiums on a timely basis; the employer ceases to maintain a group healthcare plan; coverage is obtained with another employer group healthcare plan; or the beneficiary becomes entitled to Medicare benefits. |
| Blog - 2010 blogs |
| Written by Jason Erlich |
Although the terms “harassment” or “hostile work environment” are often used to describe a difficult work environment, not every malicious or callous act taken by an employer against an employee qualifies as a legal wrong. Rather, the harassing acts must be “because of” the employee’s status in a protected group such as race, color, sex, religion, national origin, ancestry, age, disability, marital status, sexual orientation, veteran status, or medical condition.
Harassment, when based on the criteria noted above, can come in a number of forms including criticism, reprimands, and disparate treatment. If the employer permits an atmosphere within the work place that is hostile to members of the protected classes, the employer is still liable even if the complaining employee is not the direct subject of the harassing acts. Pervasive atmospheres, however, are not created by single, isolated incidents but by repeated regularity so that the harassing atmosphere constitutes a regular part of the working environment.
To qualify as a violation of California law, the harassment must occur within the working environment. Private harassment that takes place away from and is unrelated to the work-place is not prohibited conduct under California law. Further, the discriminatory acts taken against the employee must be attributable to the employer itself; workplace harassment by an employee who is of the same level as the harassed employee by itself does not constitute workplace harassment because the harassing employee’s is not considered to be the “employer.”
However, where one employee harasses another and the employer knows or has reason to know of the harassment and fails to take reasonable and prompt action to quell the conduct, then the employer may be liable for harassment. Additionally, if the harassing acts are committed by an employee with supervisory or managerial duties, then California attributes those harassing acts to the employer and holds the employer directly liable for the harassing conduct. Either way, the harassed employee may sue both the individual harasser and the employer for the harassing acts.
If you feel that a co-worker or supervisors conduct has crossed the line and might be harassment, seek legal counsel as soon as possible to learn more about your rights. |
| Blog - 2010 blogs |
| Written by Jason Erlich |
A vexing question for employees who have been hurt, been in an accident, or who suffer from a temporary medical condition is whether their employer is required to provide a reasonable accommodation under California’s Fair Employment and Housing Act (“FEHA”). Employers and employees might assume that a temporary physical or mental disability does not need to be accommodated because the employee will get better at some point in time. However, courts have found that temporary disabilities which limit a major life activity must be accommodated similar to more permanent disabilities.
Unlike the Americans with Disability Act which has generally been interpreted to not include temporary disabilities, FEHA has been interpreted to include temporary disabilities given the California Legislature’s desire for a “broad” definition of disability. FEHA’s definition of a mental disability includes “being regarded or treated by the employer . . . as having, or having had, a mental or psychological disorder or condition that has no present disabling effect, but that may become a mental disability . . .”
In the case of Diaz v. Federal Express, a federal court allowed a case to move forward to a jury trial where an employee who suffered from depression and anxiety which lasted approximately seven months could be found to be disabled under FEHA. However, in an unreported case, Ellis v. City of Reedley, the district court found that an employee who suffered from migraine headaches must have a physical condition of “minimal duration . . . that is sufficient to constitute an actual limitation of a major life activity, as opposed to simply the need to take a day off.” The court expressed its fear that every case of the flu, cold, or the average stress of the workplace will be interpreted as a disability.
These decisions counsel that an employee who suffers from temporary medical condition needs to ensure that they (1) have sufficient medical documentation from a treating health care provider which corroborates the seriousness of the disability; (2) that the medical condition limits a major life activity; and (3) that the condition is more than transitory, intermittent, or passing. |
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