Reminder-Paid Time Off to Vote

October 29, 2012

With the upcoming general election on November 6, California employers are reminded that California law provides employees with up to two hours paid time off to vote if an employee provides two working days’ notice of the need for time off on the ground that he or she does not have sufficient time to vote outside of normal working hours.  With the polls open from 7:00 a.m. to 8:00 p.m., most employees should have sufficient time outside of regular working hours to vote, but employers need to be mindful of the need to accommodate any employees who do not have sufficient time.  Employers may require that the time off be taken at the beginning or end of the employee’s shift.  California employers are also required to post a voting rights notice 10 days before the election.  Notices are available in English and Spanish on the California Secretary of State website.

New Commission Requirements Effective January 1, 2013

October 22, 2012

Beginning January 1, 2013, a new law requires employers that have any employees who receive commissions for providing services in California to have written commission agreements that meet specific requirements. The following requirements will apply whenever an employer enters into an employment contract with an employee for services and the contemplated method of payment of the employee involves a commission:

  1. The contract must be in writing
  2. The contract must set forth the method by which the commissions will be computed and paid. You can state a percentage or refer to a commission schedule.
  3. The employer must provide the employee with a signed copy of the contract.
  4. The employer must obtain a signed receipt for the contract from the employee, acknowledging both receipt of the contract and the commission arrangement.

In addition, if the contract expires but the employee continues to work under its terms, the terms will be presumed to remain in full force and effect until the contract is superseded by a new contract between the parties or either party terminates the employment.

Note: Commission wages do not include short-term productivity bonuses.


New Bills Signed Into Law

October 14, 2012

Bills Signed Into Law

AB 2386 (FEHA amendment):  This bill includes breastfeeding and conditions related to breastfeeding under the definition of “sex” under FEHA, making clear that discrimination against a woman because of breastfeeding (or related conditions) is unlawful.

AB 1744 (temporary services employers):  This bill amends Labor Code section 226 relating to itemized wage statement requirements to impose additional requirements on temporary services employers (with the exception of security services companies) effective July 1, 2013.  In addition to the information already statutorily required to be included on employees’ wage statements, temporary services employers will also need to provide itemized information concerning the rate of pay and total hours worked for each assignment.  The bill also amends Labor Code section 2810.5—the statute requiring employers to provide written notice to new employees of certain wage-related information—to require temporary services employers (effective July 1, 2013) to provide the name, physical and mailing address and telephone number of the main office of the legal entity for whom the employee will perform work.  Again, security services companies are exempt from this requirement.

AB 2103 (fixed salaries and overtime):  This legislation overturns a 2011 California court decision in Arechiga v. Dolores Press which held that an employer and employee can agree to a fixed salary that includes payment of overtime compensation.  Under the new law, Labor Code section 515 is amended to provide that payment of a fixed salary to a non-exempt employee will be deemed to be payment only for the employee’s regular non-overtime hours, notwithstanding any private agreement to the contrary.

AB 2674 (inspection of personnel records):  This bill amends Labor Code section 1198.5, which allows employees to inspect certain portions of their personnel records.  First, the new law makes clear that the inspection right applies to both current employees and former employees.  Second, the new law requires employers to maintain personnel records (including records relating to an employee’s performance and to any grievance concerning the employee) for at least three years after termination of employment. Third, the new law requires that a current or former employee (or any authorized representative) is entitled to inspect (and to receive a copy, upon request) personnel records relating to their performance and/or to any grievance concerning the employee within 30 days of making a request. The employee or representative must make the inspection request in writing, but may request a form from the employer to do so, which then must be provided by the employer.  The employer may redact the name of any non-supervisory employees referenced in the records, prior to making them available for inspection.  The employer may charge the employee the actual cost of reproduction if copies are requested.  The employer is not required to comply with more than 50 requests in any calendar month by a representative of employees for personnel records.  Additionally, if a former employee has an employment-related lawsuit pending against the employer, the employer is not required to make personnel records available under Section 1198.5 during the pendency of the lawsuit.  Finally, the new law establishes that if an employer fails to comply with inspection and copying requests under Section 1198.5, either the employee/former employee or Labor Commissioner may collect a penalty of $750.

AB 2675 (commission contracts):  Last year, legislation was enacted requiring commission payment arrangements to be in writing for California employees.  AB 2675 amends Labor Code section 2751 to exempt certain payments from this requirement.  Specifically, it exempts temporary, variable incentive payments that increase, but do not decrease, payment under the written contract.

SB 1255 (penalties for wage statement violations):  Under this new law, it will be easier for employees to prove “injury” for itemized wage statement violations and thereby recover damages or penalties.  The new law provides that employees are “injured” if the employer fails to provide a wage statement or fails to provide an accurate and complete wage statement from which the employee can promptly and easily determine the amount of the gross or net wages paid to the employee during the pay period or other specified information, the deductions the employer made from the gross wages to determine the net wages paid to the employee during the pay period, the name and address of the employer or legal entity that secured the services of the employer, and the name of the employee and only the last 4 digits of his or her social security number or an employee identification number other than a social security number, as specified.

AB 1844 (social media policies):  This legislation prohibits an employer from requiring or requesting an employee or applicant for employment to disclose a username or password for the purpose of accessing personal social media, to access personal social media in the presence of the employer, or to divulge any personal social media.  This legislation also prohibits an employer from discharging, disciplining, threatening to discharge or discipline, or otherwise retaliating against an employee or applicant for not complying with a request or demand by the employer that violates these provisions.

Vetoed Bills:

AB 1450 (discrimination against unemployed):  This bill would have made it unlawful for employers to place ads for employment that include a requirement that applicants be currently employed to be eligible.  It also would have made it unlawful to discriminate against applicants because of their status as unemployed.

AB 889 (domestic employee wage and hour requirements): This bill would have placed onerous wage and hour requirements (including relieving employees of duty for meal and rest breaks) on employers of domestic services employees (e.g. babysitters and nannies).

New laws take effect January 1, 2013 unless otherwise noted.  Employers should review their personnel policies and procedures to ensure compliance with these new laws and to minimize risk and exposure to lawsuits, particularly in the area of wage statement compliance and personnel records


Court Holds Employee Properly Terminated For Refusing To Sign Disciplinary Form

October 8, 2012

The California Court of Appeals recently ruled that an employee who refused to sign a disciplinary action form was properly terminated and was not eligible for unemployment insurance benefits.

The facts of the case were simple enough. The employee was called into a meeting with his supervisor and human resources for a violation of company policy. The employee, a union member, demanded that he be permitted to have a union representative present with him during the meeting. The employer denied the request and as a result the employee refused to sign the disciplinary form. The employer in response informed the employee that if he did not sign the form that he would be terminated. The employee for a second time informed the employer that he would not sign the form and as a result the employee was terminated for insubordination.

The employee filed for unemployment insurance benefits and based upon the above noted facts was denied benefits by the Employment Development Department and by an Administrative Law Judge at a subsequent hearing. The employee appealed to the California Unemployment Insurance Appeals Board (CUIAB) who reversed the prior decisions and found the employee eligible because in their opinion the employee’s failure to sign was, at most, a good faith error in judgment. A subsequent Superior Court appeal by the employer reversed the decision of the CUIAB holding that the employee’s failure to sign the memo violated his obligations to the employer under California Labor Code Section 2856 which states “An employee shall subsequently comply with all the directions of his employer concerning the service on which he is engaged, except where such obedience is impossible or unlawful, or would impose new and unreasonable burdens upon the employee.”

Furthermore, under Title 22 of the California Code of Regulations, Section 1256-36, subdivision (b) provides: “Implicit in the agreement of hire is the concept that an employee is subject to some degree of authority exercised by the employer or the employer’s representative. An employee is insubordinate if he or she intentionally disregards the employer’s interest and willfully violates the standard of behavior which an employer may rightfully expect of employees if the employee refuses, without justification, to comply with the lawful and reasonable orders of the employer or the employer’s representative.”

The employee argued he was afraid to sign the memo because it would be an admission of guilt however, the language under the signature clearly stated the signing of the memo was not an admission of guilt but was just an acknowledgement of having received the memo. The court sided with the employer.

Employers would do well to have their disciplinary notices include language that signing the memo/disciplinary notice is not an admission of guilt but is simply an acknowledgement that they have received the document. Furthermore, although this case was upheld as a proper termination for insubordination for the employee having refused to sign the document, it is still recommended that employers review terminations with their respective counsel or consultants prior to such termination.

New Federal Guidelines For Telling Employees To “Keep It Confidential”

October 1, 2012

In the past 60 days, the National Labor Relations Board (NLRB) has issued two decisions further striking down various employer policies and practices as violating Section 7 of the National Labor Relations Act (NLRA).  In the first case, Banner Health Systems (July 30, 2012), the NLRB held that an employer’s practice of urging employees not to discuss an ongoing investigation violated the NLRA.  In the second case, Costco Wholesale Corporation (September 7, 2012), the NLRB struck down various Costco policies regulating employees’ electronic posting and discussion of certain information.

In Banner Health, the employer’s human resource department, like most, had a practice of urging complainants and witnesses interviewed as part of an investigation not to discuss the matter with coworkers during the pendency of the investigation.  The purpose of the practice obviously was to protect the integrity of the investigation.  The NLRB held that this generalized concern with protecting the integrity of investigations was insufficient to justify the infringement on employees’ Section 7 right to engage in concerted activity for mutual aid and protection (such as discussing their wages and terms and conditions of employment).  The NLRB did not say that requiring confidentiality during an investigation was always a violation of Section 7 rights, but said that blanket confidentiality rules were a violation.  According to the NLRB, the employer must determine, in the particular circumstances of any given investigation, whether confidentiality should be required because witnesses need protection, evidence is in danger of being destroyed, testimony is in danger of being fabricated, or there is a need to prevent a cover up.  Given that one or more of these concerns are present in most investigations, employers and HR should not be afraid to continue urging confidentiality during investigations as appropriate.  Just document the reason for the confidentiality in the given investigation.

In Costco, the NLRB analyzed whether various written work rules limiting discussion and electronic posting of information violated employees’ Section 7 rights.  The NLRB struck down the following Costco rules:

• “unauthorized posting, distribution, removal or alteration of any material on Company property” is prohibited;
• Employees are prohibited from discussing “private matters of members and other employees . . . including topics such as, but not limited to, sick calls, leaves of absence, FMLA call-outs, ADA accommodations, workers’ compensation injuries, personal health information, etc.;”
• “sensitive information such as membership, payroll, confidential financial, credit card numbers, social security number or employee personal health information may not be shared, transmitted, or stored for personal or public use without prior management approval;”
• Employees are prohibited from sharing “confidential” information such as employees’ names, addresses, telephone numbers and email addresses; and
• Employees are prohibited from “electronically posting [including online message boards and discussion groups] statements that “damage the company, defame any individual or damage any person’s reputation.”

The NLRB held that these broadly phrased prohibitions violated employees’ Section 7 rights because they could “reasonably be interpreted” as prohibiting employees from discussing their wages and other terms and conditions of employment with other employees and third parties, including union representatives.  The NLRB held that there was nothing in the rules that made clear that the rules were not intended to interfere with employees’ Section 7 rights.

California Employers

The California Labor Code prohibits employers from telling employees to “keep it confidential” when interviewing witnesses during an investigation. As noted above, the Federal law has made it clear that if the employer narrowly tailors its request of keeping it confidential for specific reasons concerning the investigation, employers can. California however has not made such a distinction so let’s continue to proceed cautiously in this area.