New I-9 is Now Available

March 27, 2013

On Friday, March 8, 2013, the U.S. Department of Homeland Security finally issued the long-awaited updated I-9 Form. The old form can still be used for two months until May 7, 2013. The new I-9 form is available at http://www.uscis/gov/files/form/I-9.pdf

The I-9 form is used to verify work authorization of new hires in the U.S. as well to re-verify work authorization of foreign nationals working with temporary work authorization. The new and old forms are very similar in content. However, unlike the old one-page form, the new form is 3 pages long and easier to understand and fill out. The new form also clearly differentiates between employees who only need to be verified once (U.S. Citizens and permanent residents) and foreign nationals who are here temporarily and must be re-verified whenever their work authorization expires.

Regarding the list of acceptable documents that an employee tenders, the new form emphasizes that if a social security card is selected by the employee as a List C document, only an unrestricted social security card is acceptable. If the social security card has any restrictive language on it, it cannot be used for I-9 purposes since the individual may have obtained it when they had temporary work authorization and now no longer do.

Although there is a Spanish version of the I-9 form as well, it may only be used in Puerto Rico.

As a reminder, at the time of hire, employers must inspect an original document chosen by the employee from List A, or one each from Lists B and C. It must be done within the first 3 days of hire. It is recommended that copies of the documents be attached and retained to the I-9 as further proof of the good faith efforts by the Employer to comply with the mandate. If the documents appear to be authentic, then the employer will not be liable if it later turns out they are not authentic. The I-9 forms should be retained for 3 years after termination of employment. Employers who have enrolled in E-Verify must still have a paper or digital I-9 on file for every employee.

Employers are encouraged to periodically audit their I-9’s and take corrective action where errors are found.

Appeals Court Rules Employees Should Be Paid For “Standing Around”!

March 18, 2013

The following article was written by Art Silbergeld, Attorney-at-Law. Art represented the employer at the trial level and I asked him to give my readers his opinion regarding this recent decision. The decision, on its face, may appear to just impact dealerships however, it is far reaching and could impacts other industries as well.

In Gonzalez v. Downtown LA Motors LP, a decision of the California Court of Appeal filed on March 6, 2013, the Court dealt a potentially devastating blow to employers who pay employees – including auto dealer service technicians – on a piece rate (or flag hour) basis. The decision could impact dealerships throughout California, as well as garment industry, agricultural, transportation employers and those companies that pay inside sales employees on commission.

The right to compensate employees on a piece rate basis has been authorized in the California Labor Code since at least 1919, and that compensation system is used by employers of 1 million or more employees throughout California. All of the Industrial Welfare orders acknowledge piece rate compensation and state in section 4 that employers must pay at least the minimum wage for “all hours worked” in the payroll period. As the Supreme Court in the meal period case, Brinker Restaurants, stated: “The text of the wage order is dispositive . . .[and] The best indicator of [the IWC’s] intent is the language of the [wage order] provision itself.” Employers who pay piece rate have always assumed that the Wage Order means what it says.

Not so: even though Defendant paid its technicians at least minimum wage for all hours worked, Gonzalez states that when employees are paid on a piece rate basis, the employer must also pay them on an hourly basis at minimum rates for time in between piece rate tasks. The impact of the decision could force employers across many industries – those that use piece rate pay and those that pay employees on commission – to pay for time in between tasks when no work or work not compensated by the piece is performed. This, in turn, could force employers to revert to hourly compensation, depriving employees of the incentive to improve the efficiency of work. The incentive in the auto dealer industry has enabled thousands of technicians to earn annual pay well above per capita income year-after-year.

The Gonzalez Court arrived at its decision by superimposing on a dealer’s piece rate pay system language from an earlier decision, Armenta v. Osmose (2005) 135 Cal.App.4th 314. In Armenta, the employer refused to pay hourly employees for specific tasks at work that should have been paid. Instead of finding that employees paid on an hourly basis are entitled to be paid for “all hours worked”, Gonzalez imported from a DLSE Manual language suggesting that, in California, “all hours worked” means that every employer must pay minimum wage for each and every hour worked. When piece-rate tasks are not being performed, Gonzalez states an employer must pay for time in between tasks even if it has already added money to the paycheck to bring pay to minimum wage because the employee’s pay for all hours worked fell below minimum. The Armenta rationale has been adopted without further explanation in several decisions and, in Gonzalez, imposed wrongly, we believe, on piece rate pay.

Applied broadly, Gonzalez may trigger thousands of wage class actions against employers who are already reeling from having settled meal and rest period claims prior to the decision in Brinker Restaurant. Employers who cannot enforce individual arbitration agreements against named plaintiffs may again be exposed to class claims.
A petition for review must be filed with the California Supreme Court on or before April 15, 2013.

If you need any further information, please let me know.

Arthur F. Silbergeld
Dickstein Shapiro LLP
2049 Century Park East, Suite 700 | Los Angeles, CA 90067
Tel (310) 772-8308 | Fax (310) 772-8301

State and Federal Agencies sign Memorandum to Share Information

March 11, 2013

Over the past two years or so I have emphasized that the state agencies and the federal agencies are working together to share information. California has led the charge and others are following. The Memorandums allow the Department of Labor to share information and to coordinate efforts with participating states as part of its Misclassification Initiative.

Iowa is the latest State to sign a Memorandum of Understanding and join forces with the U.S. Department of Labor to combat employee misclassification. Although Labor Secretary Solis has announced her resignation, it appears that the Misclassification Initiative that she championed continues, at least for now.
As mentioned in a previous these Memorandums of Understanding with state government agencies arose as part of the DOL’s Misclassification Initiative, with the goal of preventing, detecting and remedying employee misclassification. Iowa is now the fourteenth State to sign one of these Memorandums after California, Colorado, Connecticut, Hawaii, Illinois, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Montana, Utah and Washington.

For nearly sixteen months, the DOL has been going after employers who misclassify employees as independent contractors. Since September 2011, the Wage and Hour Division has collected more than $9.5 million in back wages, primarily for minimum wage and overtime violations under the FLSA, which resulted from more than 11,400 workers being misclassified as independent contractors or otherwise not properly treated as employees. The DOL has stated that this represents an 80% increase in back pay and 50% increase in the number of workers receiving back pay since these agreements have been implemented between the DOL and the States.

Insight for Employers

It is important to remember that whether a worker is an independent contractor or an employee is a very fact specific analysis. If the misclassification of a worker as an independent contractor occurs, these employees may be denied appropriate wages and benefits. Similar to the misclassification of an employee as exempt, failure to properly classify a worker as an employee may lead to significant liability. Because of the amount of money at issue when employee(s) are misclassified, it may be worth a few minutes of your time to confirm with an experienced HR consultant or employment law attorney that your workers are properly classified.

What You Should Know About the EEOC and Arrest and Conviction Records

March 4, 2013

Background: On April 25, 2012, the Commission, in a 4-1 bi-partisan vote, issued its Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e. The Guidance updates, consolidates, and supersedes the Commission’s 1987 and 1990 policy statements on this issue, as well as the relevant discussion in the EEOC’s Race and Color Discrimination Compliance Manual Chapter. The Guidance is designed to be a resource for employers, employment agencies, and unions covered by Title VII; for applicants and employees; and for EEOC enforcement staff.

1) Does this Guidance prohibit employers from obtaining and using criminal background reports about job applicants or employees?

No. The EEOC does not have the authority to prohibit employers from obtaining or using arrest or conviction records. The EEOC simply seeks to ensure that such information is not used in a discriminatory way.

2) How could an employer use this information in a discriminatory way?

There are two ways in which an employer’s use of criminal history information may be discriminatory. First, the relevant law, Title VII of the Civil Rights Act of 1964, prohibits employers from treating job applicants or employees with the same criminal records differently because of their race, national origin, or another protected characteristic (disparate treatment discrimination).Second, the law also prohibits disparate impact discrimination. This means that, if criminal record exclusions operate to disproportionately exclude people of a particular race or national origin, the employer has to show that the exclusions are “job related and consistent with business necessity” under Title VII to avoid liability.

3) How would an employer prove “job related and consistent with business necessity”? Is it burdensome?

Proving that an exclusion is “job related and consistent with business necessity” is not burdensome. The employer can make this showing if, in screening applicants for criminal conduct, it (1) considers at least the nature of the crime, the time elapsed since the criminal conduct occurred, and the nature of the specific job in question, and (2) gives an applicant who is excluded by the screen the opportunity to show why he should not be excluded.

4) Is the Guidance a new Commission policy?

No. The Guidance follows the text of the law about disparate treatment and disparate impact discrimination. Since at least 1969, the Commission has received, investigated, and resolved discrimination charges involving criminal records exclusions, and federal courts have analyzed the civil rights law as applied to criminal record exclusions since the 1970s. In addition, in 1987 and 1990, the EEOC issued three policy statements on this issue, and it also referenced the topic in its 2006 Race and Color Discrimination Compliance Manual Chapter. Finally, in 2008, the EEOC’s E-RACE (Eradicating Racism and Colorism from Employment) Initiative identified criminal record exclusions as one of the employment barriers that are linked to race and color discrimination in the workplace. Thus, applying Title VII to the use of criminal history information in employment decisions is well-established.
The above information was pulled straight from the EEOC website. The EEOC recently announced its concerns about arrest records being used for the exclusion of job applicants. I wanted you to see their concerns firsthand.

Note: As a reminder, in California it is illegal to ask a job applicant if he has ever been arrested. You can ask about convictions.