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Daniel J. Turner on May 9, 2018
Synopsis:

 

 

In the wake of recent and high profile sexual harassment cases and the continued gap in wages between men and women, the California Legislature is on the verge of making significant changes to the Fair Employment and Housing Act.  The following is a brief summary of the various proposals working their way through the California State Assembly and State Senate:

Assembly Bill 1870:  Extends the statute of limitations for a person to file a complaint with the Department of Fair Employment and Housing ("DFEH") from one year to three years.  Proponents of AB 1870 argue that extending the time to file a claim with the DFEH will allow parties “additional time to resolve grievances outside of court, without feeling compelled to file a claim in order to meet” the current one-year filing deadline.  In addition, supporters of AB 1870 point out that the statute of limitations for personal injury in California is two years and that employees alleging harassment and discrimination should have time to file their claims with the DFEH commensurate with other types of civil actions. 

AB 1870 is supported by, among others, the California Employment Lawyers of America, the Anti-Defamation League and the American Civil Liberties Union of California Center for Advocacy and Policy.  The California Chamber of Commerce, the California Restaurant Association and the California State Association of Counties are among those opposing the proposed change.

The Assembly Labor and Employment Committee passed AB 1870 by 6-0 vote on April 18, 2018 and referred the bill to the Appropriations Committee for further consideration.

Senate Bill 1284:  Requires employers with 100 or more employees to submit a detailed “annual pay data report” to the Department of Industrial Relations (“DIR”) by September 30 each year.  The annual pay data report – which will be made available to the Secretary of State, the DFEH and the Commission on the Status of Women – must include the number of employees by race, ethnicity, and sex in the each of the following categories:  executive or senior level officials and managers; first or mid-level officers and managers; professionals; technicians, sales workers; administrative support workers; craft workers; operatives; laborers and helpers; and service workers.  In addition, the data report “shall identify each employee’s total earnings as shown on the Internal Revenue Service Form W-2 for a 12-month period looking back from any pay period between July 1 and September 30 of each reporting year.”  If an employer operates multiple establishments, the employer “shall submit a report for each establishment and a consolidated report that includes all employees.”

Senate Bill 1284 also provides that employers failing to comply are subject to a civil penalty of five hundred dollars ($500) and that any civil penalties collected must be deposited into the Labor Enforcement and Compliance Fund and – upon appropriation by the Legislature – would be allocated to the DLSE to enforce pay equity requirements.  Senate Bill 1284 made it out of committee on a 5-2 vote and is currently before the Appropriations Committee. 

Jennifer Grock on January 30, 2018
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Golden State To Increase Monetary Benefits Available As Of January 1, 2018

California was the first state in the nation to offer paid family leave.  Today, it remains one of only a handful of states in the country to offer such a program.  Since its implementation in 2004, Californians who have the SDI deduction taken from their paychecks - including all employees and self-employed individuals who choose to contribute - are eligible to receive partial wage replacement benefits through the state’s Employment Development Department for up to six weeks, in order to bond with a new baby or care for a seriously ill family member, among other reasons.  Wage replacement funds are also available to Californians who are placed on a disability leave by their physicians.

Effective January 1, 2018, California has made changes to the benefits available to workers.  Going forward, eligible workers will receive 60 to 70% of their gross wages while on Paid Family Leave, depending on their income level.  Previously, only 55% of gross wages were provided.  Similar financial adjustments have been made to increase the state’s disability payments.  In addition, the state has done away with the waiting period that previously forced Paid Family Leave participants to go without financial benefits for a week at the start of their leaves. In another change, benefits are now capped at an increased amount of $1,216.

Employers and employees alike should note that the receipt of financial benefits from the EDD does not necessarily mean that an impacted employee is entitled to or has fulfilled the requirements necessary to receive job-protected leave.

Daniel J. Turner on November 10, 2017
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Federal Jury Finds That Employer Not Liable For Failing To Provide "Easy Access" To Wage Statements

This week, in Guillen v. Dollar Tree Stores Inc., (15-CV3813) a federal jury found that Dollar Tree was not liable for how it provided wage statements to those employees who received their pay via direct deposit.  Although Plaintiffs conceded that the wage statements provided all of the information required by California Labor Code Section 226(a) and were, therefore, compliant they nevertheless alleged that Dollar Tree violated Section 226(a) because it didn’t provide easy access to those employees who used direct deposit as the Company required them to use the store’s cash register printers in order to make physical copies of their pay stubs.  (For those of you wondering, Labor Code Section 226 does not require “easy access” to pay stubs, although a 2006 DLSE Opinion Letter provided that electronic wage statements are permissible “so long as each employee retains the right to elect to receive a written pay stub or record and those who are provided with electronic wage statements retain the ability to easily access the information and convert the electronic statements into hard copies at no expense to the employee.”)

 Even though it only took the jury approximately one hour to determine that Dollar Tree’s policy did not violate the Labor Code, the case provides a valuable reminder that “defective” wage statement class actions are alive and well and that plaintiffs are willing to file such claims for the most technical of “violations” or – as was the case in Dollar Tree – for no real violation at all.  Accordingly, employers should review their wage statements to ensure that they are in compliance with Section 226(a) and that their wages statements provide:  (1) gross wages earned; (2) total hours worked by non-exempt employees; (3) the number of piece-rate units earned and any applicable piece-rate if the employee is paid on a piece-rate basis; (4) all deductions; (5) net wages earned; (6) the inclusive dates of the period for which the employee is paid; (7) the name of the employee and only the last four digits of his or her social security number or an employee identification number; (8) the name and address of the legal entity that is the employer; and (9) all applicable hourly rates in effect during the pay period and the corresponding number of hours worked at each hourly rate by the employee. 

It is crucial that employers are in compliance with these requirements as Section 226(e) provides that an employee “suffering injury as a result of a knowing and intentional failure” to comply with Section 226(a) is entitled to up to $4,000 in penalties depending on the number of non-compliant wage statements.  To make matters worse, the California Legislature made clear that an employee suffers “injury” if the employer fails to provide any of the nine pieces of information set forth in Section 226(a) and, therefore, it is extremely difficult for employers to offer up any defense for even the most technical of wage statement violations. 

Daniel J. Turner on October 24, 2017
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California Joins A Growing Number Of States And Cities In An Attempt To Remedy Wage Disparities 

Governor Brown also recently signed A.B. 168, which adds Section 432.3 to the Labor Code as of January 1, 2018. 

 Labor Code Section 432.3 prohibits employers from:  (i) relying on the salary history information of an applicant for employment as a factor in determining whether to offer employment to an applicant or what salary to offer an applicant; and (ii) seeking the salary history information – including compensation and benefits – about an applicant for employment.  In addition, the newly enacted Labor Code Section requires employers to provide the pay scale for the position for which the applicant is applying upon “reasonable request.” 

 Labor Code Section 432.3 does not, however, prohibit an applicant from “voluntarily and without prompting” disclosing salary history information to a prospective employer.  Under such circumstances, the employer many consider the voluntarily disclosed salary information in “determining the salary for the applicant.”  As a result, even if an applicant voluntarily discloses their salary history information, an employer cannot use such information in determining whether to extend an offer of employment in the first place. 

 California joins Massachusetts, New York City, and Puerto Rico in banning salary history inquiries during the hiring process and several other cities and states are considering similar legislation.  Advocates of banning the use of salary information believe it will help remedy pay disparities for women and minorities as using salary history as a factor in setting compensation with a new employer perpetuates wage disparities.  

Daniel J. Turner on October 23, 2017
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     As many of you know, employers in California that have more than 50 employees are required to provide at least two hours of classroom or “other effective interactive training and education” regarding sexual harassment to all supervisory employees in California within six months of their assumption of a supervisory position.  In addition, employers that are required to provide harassment training to their supervisory employees must do so at least once every two years.  (Government Code Section 12950.1(a)). 

     Last week, Governor Brown extended these training requirements and – starting January 1, 2018 – employers “shall also provide training inclusive of harassment based on gender identity, gender expressions, and sexual orientation” as a component of the training and education already required pursuant to Government Code Section 12950.1(a).  Similar to the current requirements, harassment training on these subjects must include “practical examples inclusive of harassment based on gender identity, gender expression, and sexual orientation” and shall be presented by trainers or educators with knowledge and expertise in those areas.

     Accordingly, employers should carefully review their harassment training materials to make sure that it complies with California law and includes training on gender identity, gender expression and sexual orientation.  In addition, since an employer’s compliance with Government Code Section 12950.1(a), even as amended, does not insulate the employer from liability for sexual harassment of any current or former employee or applicant, employers need to take additional steps to prevent harassment in the workplace.  Such a strategy would include:  (i) adopting (and communicating) a zero tolerance anti-harassment policy; and (ii) ensuring that all complaints are promptly and fully investigated by maintaining a clear internal process for investigating any complaint of harassment. 

 

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