Brett T. Abbott
Wednesday, March 25, 2015
Sunday, December 16, 2012
Round and Round We Go: Rounding Policies in California
A California court recently held that employers may lawfully use rounding policies, i.e. policies that round an employee's time worked to the nearest tenth of an hour worked (or other similar increment) for purposes of calculating pay.
In the case of Silva v. See's Candy, See's employees were required to use a timekeeping system to record their start and end times of work. See's incorporated a rounding policy in which times would be rounded to the nearest tenth of an hour (up or down) for payroll purposes. A former See's employee filed a lawsuit claiming the rounding policy resulted in underpayment of wages.
The court held that "the rule in California is that an employer is entitled to use the nearest-tenth rounding policy if the rounding policy is fair and neutral on its face and it is used in such a manner that it will not result, over a period of time, in failure to compensate the employees properly for all the time they have actually worked." Thus, the legality of a rounding policy depends on (1) whether it operates over time to pay employees for all time worked and (2) whether it does not to short employees. In the See's case, there was an expert’s report filed with the court that concluded that the See’s rounding policy actually had a net effect of slightly overpaying employees.
The See’s case is the first published California decision to uphold the use of rounding policies. However, not all rounding policies would be found legal in the eyes of the law. The key requirement is that the policy, over time, properly compensates employees for hours worked and that it does not result in underpayment. Absent these requirements, a rounding policy can create substantial liability for employers.
Wednesday, October 10, 2012
Social media and privacy rights
Virtually everyone – yes,
probably even your parents – is on Facebook.
Facebook’s hundreds of millions of users share untold photos, stories,
random thoughts and personal information all day, every day. And unlike a phone call or in-person
conversation, Facebook, and other social media sites, keeps a permanent record
of every user’s online life. As such,
social media can create new and unique challenges for employees and employers
alike.
In light of this trend, some states have drafted legislation seeking to outlaw what some consider an invasion of a job applicant’s privacy. Lawmakers in California, as well Illinois and Maryland, have proposed legislation that would prohibit employers from requiring that current or prospective employees provide or disclose any user names, passwords, or other ways of accessing personal online accounts. State lawmakers from Connecticut and New Jersey are considering drafting similar legislation, as is the United States Senate.
Social media isn’t going anywhere. If anything, Facebook, Twitter and others are becoming ever more entrenched in virtually every aspect of online life. Similarly, employers are not going to stop screening and investigating job applicants, and social media can often give employers an unfiltered glimpse as to who an applicant really is. So for the time being, employers are free to mine social media sites for information on potential applicants, but California law has made it very clear that employers cannot demand that applicants or employees hand over user names and passwords.
Thursday, August 2, 2012
Preserving the at-will relationship
California is an at-will employment state. A landmark California case put it thusly: “An
employment, having no specified term, may be terminated at the will of either
party on notice to the other." Dore v Arnold Worldwide, Inc. (2006) 39
C4th 384, 391, 46 CR3d 668. It is in every employer’s best interest to
keep the at-will relationship intact. Failure
to do so can create situations where the employment relationship may be only be
terminated upon a showing of good cause.
There are several ways in which the at-will status of an employee can be
modified. This article will explore some
of these.
Certain employer communications
or actions can give rise to an enforceable expectation by the employee that he
or she may only be terminated for good cause.
Some examples include verbal assurances of job security, regular
promotions, salary increases, and bonuses. Some creative employee-rights attorneys will even
use birthday cards with innocuous statements from supervisors – like “Keep up
the good work!” or “What would we do without you?” – as evidence that an
employee expected that termination could only be for good cause.
However, oral assurances, or
regular promotions and salary increases, do not automatically establish an
implied contract, i.e. that termination can only be for good cause. Several
courts have concluded that without more, "promotions and salary increases
are natural occurrences of an employee who remains with an employer for a
substantial length of time... and should not change the status of an 'at-will'
employee to one dischargeable only for just cause." Miller v Pepsi-Cola
Bottling Co. (1989) 210 CA3d 1554, 1559.
Courts will often consider
other documents prepared by the employer to determine the existence of an
implied contract to terminate only for cause.
These writings include employment applications, letters, stock option
agreements, bylaws, and other writings bearing on the employment relationship.
Yet the safest bet is to
include express language in an employee handbook which makes the at-will
relationship explicit, and states that such relationship can only be modified
in writing by the president/owner of the company. It’s also imperative to have the employee
sign-off on his or her copy of the employee handbook, showing that he or she
has read, understands, and agrees to be bound by the at-will relationship.
Friday, July 6, 2012
It’s vacation time!
Summer time is vacation
time. Like many employers, you probably
offer some sort of vacation benefits to your employees. While such benefits are universally
appreciated by employees, employers can run into trouble if the rules regarding
vacation pay are not properly followed.
This article will explore the ins and outs of vacation pay in California.
Vacation pay is a form
of wages
There is no requirement that
employers provide vacation pay, but if this benefit is offered, it must comply
with numerous rules. Vacation pay is contract between the employee and the
employer; it is a form of wages.
Employers can set the amount of vacation that an employee earns. However, employers must be clear about how
much vacation is offered, how it accrues, and when it starts to accrue. It is legal to require that a certain period
of time pass before an employee starts to accrue vacation.
Because vacation is a form of
wages, the right to vacation accrues on a daily basis. Employers are free to require that employees
take vacation only when they have already accrued or earned it.
Avoid use-it-or-lose it
vacation policies
Once an employee has earned
vacation, an employer cannot take it away.
California
law strictly prohibits Use-It-Or-Lose-It vacation policies, i.e. where an employee loses accrued vacation that
has not been used by a specific time.
However, as shown below, reasonable caps on vacation and cash-out
policies are allowed.
A reasonable cap on
vacation is legal
Employers can establish a
reasonable cap plan, meaning that once a certain level of accrued vacation is
earned but not taken by the employee, no new vacation will accrue until some of
the accrued vacation is taken. Once some
vacation is taken by employee, vacation must continue to accrue again at the
regular rate.
The cap on vacation must be
reasonable. The most common caps used by
employers are one-and-one-half or two times the annual accrual rate. For example, if an employee earns 40 hours of
vacation per year, a reasonable cap would be 60 hours or 80.
Cash-out policies are
also legal
Employers are also free to
offer employees the option to cash-out their accrued vacation benefits. Cash-out policies can be on an “as needed”
basis or allowed only once a month or once a year. Many employers require employees to accept
pay at the end of each year for vacation time that
employees accrued but did not
take.
Vacation must be paid
at termination
Because accrued vacation is a
form of wages, an employer must pay out all accrued, unused vacation at the
termination of the employment relationship.
This pay-out must be at the employee’s final rate of pay, regardless of
the rate of pay at which the vacation time was earned.
Thursday, June 7, 2012
Working in a post-Brinker world
One of
the most widely-followed labor and employment cases of the last decade finally
reached a conclusion a few weeks ago. In
the case of Brinker Restaurant
Corporation v. Superior Court of San Diego, the California Supreme Court
handed down a landmark decision concerning meal and rest breaks. Below is a summary of the key points from the
Brinker decision.
Rest Periods
The Court held that employees are entitled to 10
minutes of rest for shifts from three and one-half to six hours in length, 20
minutes of rest for shifts of more than six hours up to 10 hours, and 30
minutes for shifts of more than 10 to 14 hours.
Regarding the timing of the rest breaks, the Court
rejected the suggestion that employers have a “legal duty” under “to permit
their employees a rest period before any meal period.” Instead, the Court
found that employers are “subject to a duty to make a good faith effort to
authorize and permit rest breaks in the middle of each work period, but may
deviate from that preferred course where practical considerations make it
infeasible.”
Meal Periods
Regarding
the timing of meal breaks, the Court looked to the language of Labor Code
section 512(a), holding that, absent a waiver by the employee, “employees are
entitled to a first meal period no later than the end of an employee’s fifth
hour of work and a second meal period no later than the end of an employee’s
10th hour of work.”
There is NO requirement that an employer
ensure work is not being performed
The plaintiff in the Brinker case argued that employers were required to “ensure” that
work ceases for the 30 minute meal period. The Court did not agree.
Using Wage Order No. 5 and Labor Code section 512(a) as a guide, the Court held
that an employer must “relieve” the employee of work, “but need not ensure that
the employee does no work.” The Court used the following analysis:
“An
employer’s duty with respect to meal breaks…is an obligation to provide a meal
period to its employees. The employer satisfies this obligation if it relieves
its employees of all duty, relinquishes control over their activities and
permits them a reasonable opportunity to take an uninterrupted 30-minute break,
and does not impede or discourage them from doing so. What will suffice may
vary from industry to industry…
On
the other hand, the employer is not obligated to police meal breaks and ensure
no work thereafter is performed…[R]elief from duty and the relinquishing of
control satisfies the employer’s obligations, and work by a relieved employee
during a meal break does not…place the employer in violation of its
obligations…”
Employers have waited years for this decision. The Brinker
case provides much-needed clarification on an issue relevant to virtually all
employers in California. Employers state-wide can now breathe a small
sigh of relief, knowing that they are not required to police meal breaks. Instead, employers must (1) relieve employees
of their duties, (2) relinquish control over employees’ activities, (3) permit
employees a reasonable opportunity to take an uninterrupted 30-minute break,
and (4) not discourage employees from doing so.
Tuesday, April 10, 2012
Will being unemployed soon be a protected class?
California, as well as the nation as a whole, in is the midst of
very trying times. Unemployment is high;
qualified and experienced men and women everywhere are finding it hard to find
work. Some have been out of the
workforce for so long, they are finding it difficult to get back in.
State and federal legislators
are taking action to combat this problem.
There is a movement by both California
and the federal government to make being unemployed a new protected class. And with a higher-than-normal percentage of
potential voters out of work, politicians seeking re-election this year will
surely attempt drum up support for this proposed legislation.
In California, legislation has been introduced
to protect unemployed workers, and thus prohibit an employer from using a
person’s unemployed status at the time of applying for a job as a negative
criteria in the hiring process. This
bill, AB 1450, was introduced a few months ago in January. Similar to the California bill, Congress has introduced HR
2501 in the House and S 1471; these two bills would provide similar protections
to workers on a nationwide level.
Currently, most protected
status complaints and lawsuits deal with harassment and termination of the
employment relationship; lawsuits based on failure to hire are generally
rare. Yet if either of these bills are
passed, employers can expect an uptick in litigation by unemployed applicants
who apply for positions and are not hired, especially if those applicants
appear to be otherwise qualified.
Employers would be wise to consider altering their hiring practices, and
provide some additional training to those making the decision to hire new
employees in order to avoid problems down the road. And while these proposed bills are not yet
the law, given the state of California
and the country’s economic woes, and the fact that this is an election year,
employers could very soon have another thing to worry about.
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