New Piece Rate Law Update!

January 25, 2016

There has been many inquiries to our office regarding the “New Piece Rate Law.” I have asked Art F. Silbergeld, Esq. and Jennifer A. Awrey, Esq., who were both involved in the Gonzalez v. Downtown LA Motors case to clarify the impact of the new law. The following article was written by them. If you have any questions their telephone number appears below.

The new law affecting piece rate pay that went into effect on January 1, 2016 has created a certain amount of confusion among retail automobile dealers.  The law, AB 1513, creates Labor Code Section 226.2 and requires employers to pay for employees who are paid on a piece-rate basis for any work during a pay period.  Employees who are paid on a piece-rate basis must be paid for rest periods, recovery periods when working in excessive heat, and for other nonproductive time separate from any piece-rate compensation.

As a result of the Court of Appeal decision in Gonzalez v. Downtown LA Motors which essentially undermined the concept of piece-rate pay as covering all work during a pay period as long as minimum standards were met, almost all California retail auto dealers who historically had paid service technicians on a piece-rate basis changed their compensation plans.  Since 2014 most dealers began paying on an hourly basis with a production bonus based on work performed.  AB 1513 confirms that paying technicians only on a piece-rate basis does not meet California Labor Code standards.

However, not to panic.  Several sections of AB 1513 do not apply to a new motor vehicle dealer as defined by Section 426 of the Vehicle Code.  Only Section (a) applies to new car dealers.  For any dealer who has not converted to an hourly pay basis, the dealer must:

  1. Compensate separately for rest, recovery, and other nonproductive time;
  2. Provide on the pay statement itemized listings of total hours of such time;
  3. Report the gross pay for such time;
  4. Pay minimum or average hourly wage for such time;
  5. Record how these calculations are done by April 30, 2016; and
  6. Ensure that pay for each day in the pay period is no less that minimum wage and      any required overtime

Other sections of AB 1513 provide time limits for compliance, a safe harbor, and affirmative defenses to recovery of wages, damages, and penalties.  These other sections do not apply to a dealer under Section 426.

Arthur F. Silbergeld

Jennifer A. Awrey

(213) 892-9200

NOTE: A second article will go out this week for my national followers. I am also putting out information on “LinkedIn” once a week usually on Wednesday.


Job References, a Common Sense Approach!

January 18, 2016

A common question we receive is whether or not the employer should give out any information when they receive a call from a company looking for information on a former employee. If that employee was a very good employee most do not hesitate to give out the information. When that former employee was less than stellar, or worse, fired, then there is some hesitancy. The options in either case are:

(a) You can ignore it (unless it is for a state or federal agency).

(b) Confirm only the fact of prior employment and dates (always get their request in writing).

(c) Give a truthful, negative reference (which is not a violation of the law).

Most employers do either “a” or “b”, while very few opt for “c”. Many employers avoid “c” because they fear liability if the ex-employee loses a job because of a negative reference. Yet, in many states, if not all, there is nothing illegal about providing truthful, negative information.

My hat goes out to one state, Ohio, who actually created a privilege for employers to provide information about the job performance of a former employee to a prospective employer of that employee. That privilege in part reads;

“An employer who is requested by an employee or a prospective employer of an employee to disclose to a prospective employer of that employee information pertaining to the job performance of that employee for the employer and who discloses the requested information to the prospective employer is not liable in damages in a civil action to that employee, the prospective employer, or any other person for any harm sustained as a proximate result of making the disclosure or of any information disclosed, unless the plaintiff in … establishes … (1) … that the employer disclosed particular information with the knowledge that it was false, with the deliberate intent to mislead the prospective employer or another person, in bad faith, or with malicious purpose; or (2) … that the disclosure of particular information by the employer constitutes an unlawful discriminatory practice….”

This is fair! Employers should be able to give out truthful information on a former employee. So, if the practice of providing a truthful, non-malicious, good faith, non-discriminatory negative reference is perfectly legal, why are so many employers wary of doing it? Because there is still that underlying fear that someone will sue.

If you as an employer feel you do want to be able to give out job verifications, (not references) consider these points:

  1. Put one person in charge of the process.
  2. Never give out any information over the phone.
  3. Always have them give their request for information in writing.
  4. Have them send you a signature from the former employee granting permission to release the information.

What does all this mean? It means that even though employers legally can give out truthful information, although negative, the associated transactional costs from potential litigation (no matter how unlikely for an employer to lose) is enough of a deterrent such that negative job references are almost non-existent. However, if you follow the common sense rules outlined above, you really should not have to worry about litigation especially if you have the former employee’s signature granting you permission to release truthful information.

The times are changing and employers have to try and start cooperating with each other to weed out bad employees. And I am not referring to “bad employees” as those who may have filed a workers compensation claim. Stay out of that area! I am speaking directly to performance related issues and discharges for violations of company policies.

Let’s go one easy step at a time and eventually, like Ohio, maybe we can get this done.

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Reasonable Accommodations for Applicants

January 11, 2016

Employers cannot forget or ignore that their obligations under the ADA to provide reasonable accommodations does not just cover employees, but also extends to job applicants. One of six national priorities identified by the EEOC is eliminating barriers in recruitment and hiring.

With this in mind, an employer must provide a reasonable accommodation to a qualified applicant with a disability that will enable the individual to have an equal opportunity to participate in the application process and to be considered for a job (unless it can show undue hardship). Thus, individuals with disabilities who meet initial requirements to be considered for a job should not be excluded from the application process because the employer speculates, based on a request for reasonable accommodation for the application process, that it will be unable to provide the individual with reasonable accommodation to perform the job. In many instances, employers will be unable to determine whether an individual needs reasonable accommodation to perform a job based solely on a request for accommodation during the application process. And even if an individual will need reasonable accommodation to perform the job, it may not be the same type or degree of accommodation that is needed for the application process. Thus, an employer should assess the need for accommodations for the application process separately from those that may be needed to perform the job.

Here are some key basics.

Reasonable Accommodation

Title I of the Americans with Disabilities Act of 1990 (the “ADA”) requires an employer to provide reasonable accommodation to qualified individuals with disabilities who are employees or applicants for employment, unless to do so would cause undue hardship. “In general, an accommodation is any change in the work environment or in the way things are customarily done that enables an individual with a disability to enjoy equal employment opportunities.” There are three categories of “reasonable accommodations”:

“(i) modifications or adjustments to a job application process that enable a qualified applicant with a disability to be considered for the position such qualified applicant desires; or

(ii) modifications or adjustments to the work environment, or to the manner or circumstances under which the position held or desired is customarily performed, that enable a qualified individual with a disability to perform the essential functions of that position; or

(iii) modifications or adjustments that enable a covered entity’s employee with a disability to enjoy equal benefits and privileges of employment as are enjoyed by its other similarly situated employees without disabilities.”

The duty to provide reasonable accommodation is a fundamental statutory requirement because of the nature of discrimination faced by individuals with disabilities. Although many individuals with disabilities can apply for and perform jobs without any reasonable accommodations, there are workplace barriers that keep others from performing jobs which they could do with some form of accommodation. These barriers may be physical obstacles (such as inaccessible facilities or equipment), or they may be procedures or rules (such as rules concerning when work is performed, when breaks are taken, or how essential or marginal functions are performed). Reasonable accommodation removes workplace barriers for individuals with disabilities.

Reasonable accommodation is available to qualified applicants and employees with disabilities. Reasonable accommodations must be provided to qualified employees regardless of whether they work part- time or full-time, or are considered “Introductory.” Generally, the individual with a disability must inform the employer that an accommodation is needed. Remember, this is Federal. Some states, such as California, have stricter guidelines.

There are a number of possible reasonable accommodations that an employer may have to provide in connection with modifications to the work environment or adjustments in how and when a job is performed. These include:

  • making existing facilities accessible;
  • job restructuring;
  • part-time or modified work schedules;
  • acquiring or modifying equipment;
  • changing tests, training materials, or policies;
  • providing qualified readers or interpreters; and
  • reassignment to a vacant position.

A modification or adjustment is “reasonable” if it “seems reasonable on its face, i.e., ordinarily or in the run of cases;” this means it is “reasonable” if it appears to be “feasible” or “plausible.” An accommodation also must be effective in meeting the needs of the individual. In the context of job performance, this means that a reasonable accommodation enables the individual to perform the essential functions of the position. Similarly, a reasonable accommodation enables an applicant with a disability to have an equal opportunity to participate in the application process and to be considered for a job. Finally, a reasonable accommodation allows an employee with a disability an equal opportunity to enjoy the benefits and privileges of employment that employees without disabilities enjoy.

Disability claims are soaring. Keep these guidelines handy and get the information out to your managers and supervisors. If you have any doubts about an accommodation contact your advisor or counsel before you act.

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Do Employers Owe Overtime Compensation for Checking Emails After Hours?

January 4, 2016

The issue of whether employers owe overtime( under the Fair Labor Standards Act) to non-exempt employee for time spent away from work checking emails on mobile devices has finally been determined at least by one court. Do not be thrown off because the case involved police officers. The issue applies to every industry. As an example, employees who work in sales could be potential litigants.

In Allen v. City of Chicago, the court held that in the Chicago Police Department did not violate the FLSA by failing to pay police officers for off-duty time working on their employer-issued BlackBerrys. Yet, the case is not a clear win for employers across the board.

The court applied a two-pronged test to determine whether the police officers were entitled to overtime for off-duty emailing.

  1. Did they perform compensable “work” for which they were not paid?
  2. Did the employer have actual or constructive knowledge that the employees performed work without compensation?

On the first question, the court determined that some, but not all, of the off-duty activities the employees performed on their Blackberrys constituted compensable work under the FLSA. The court drew a line between those tasks necessary to the employees’ jobs (compensable) and those incidental and non-essential (not compensable).

The Department-issued BlackBerrys give the plaintiffs the ability to perform certain necessary work while on and off duty. Some activities plaintiffs performed on their BlackBerrys had to be done immediately, even if they were off duty. These activities include reaching out to criminal investigators, gathering information on investigations that were heating up, and contacting and reallocating teams of officers in response to a shooting. Such off-duty activities were at times pursued necessarily and primarily as part of plaintiffs’ jobs, and constituted compensable work under the FLSA.

However, the evidence failed to show that all of the off-duty activities plaintiffs performed on their BlackBerrys were a necessary part of their jobs. For example, the mere act of plaintiffs “monitoring” their BlackBerrys does not constitute an activity pursued necessarily and primarily for the benefit of the City under the FLSA, so long as the plaintiffs could still spend their off-duty time “primarily for their own benefit without persistent interruptions.”

On the second question, the court determined that, despite the compensable nature of the employees’ off-duty time, the employer nevertheless prevailed because it lacked any actual or constructive knowledge of the work being performed.

Plaintiffs fell far short of showing a uniform culture or well-grounded understanding that off-duty BlackBerry work would not be compensated. Plaintiffs were not able to prove that supervisors had specific knowledge of off-duty BlackBerry work being performed without compensation.

What does all this mean? It means that in the opinion of this one court, some off-the-clock time spent checking email is compensable work, if (1) it’s essential, and not merely incidental, to the employees’ jobs, and, (2) regardless of whether the time is compensable, the employer still must know, or have reason to know, of the time worked.

For now, what steps can employers take to minimize the risk of this breed of overtime claim?

  1. If possible, limit smartphone issuance to non-exempt employees.
  2. For non-exempt employees, consider implementing an email curfew or other policy that prohibit or limit the use of email off-duty.
  3. Prohibit your exempt employees from communicating with non-exempt employees while they are off-the-clock.
  4. Implement a reasonable process for employees to report uncompensated off-the-clock work (and follow it).
  5. Monitor employees’ access of and use of your email and other electronic systems to ensure compliance with your policies on off-duty emailing.
  6. If you know, or have reason to know, that your employees are breaching your rules on off-duty email, counsel or discipline the violation, terminate repeat offenders, and, regardless, pay for the time worked.

Understand, there are state and federal laws changing every day that benefit employees. Employers have to be prepared by implementing policies to ensure that employees are being properly compensated. If you are unsure, I would strongly urge that you have an HR audit conducted by qualified individuals to verify your current policies meet state and federal guidelines.