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EMPLOYMENT LAW UPDATE
Valorie Bader, Esq., McMillian & Shureen, LLP

NEW WAGE AND HOUR LAW?

Employers are still on hold as to whether payments for meal period violations are wages or penalties. If a wage, an employee can reach back three years to claim the failure to comply with meal break regulations, and add waiting time penalties to the back due wages, If a penalty, the employee can only claim one year of payment, without additional waiting time penalty.

Wage and Hour Compliance in 2007
  • Post new minimum wage order (download http://www.dir.ca.gov/- as minimum wage will be $7.50 in 2007 and $8.00 in 2008.
  • Revisit meal period practices: employee time records must have start and stop times for meal breaks. Employees must be allowed 30 minutes minimum for lunch with the freedom to leave work. The meal period must begin no later than the 5th hour of the day. If staffing or other operational needs interfere with these requirements, consider valid meal period waivers.
  • Revisit exempt employees pay practices: are they being paid twice minimum wage (now $2,600/mo or $31,200/yr). Are you deducting for absences under valid vacation or sick leave policies for half-day absences?
  • Issue final paychecks with a proviso that the employee immediately brings any discrepancies to your attention. Waiting time penalties attach to the failure to pay overtime, vacation pay, or at the employeeÕs Òregular rateÓ on termination.
  • Pay casual labor immediately when the job is done.
  • Clarify Commission policies. A clear and reasonable commission policy that requires employees to repay commissions paid out without being fully earned complies with the law. However, changing the policy without notice to the employee prior to application of the change will result in claims before the DLSE or lawsuits.

2007 Policies and Benefit News
  • Do not help employees who try to evade their family support obligations, as recent legislation prohibits and punishes assistance in hiding or under reporting employee income.
  • Change cell phone use policies for employees who drive and supply hands-free due to new law.
  • IRS Mileage Reimbursement increases to 48.5 cents per gallon.
  • Domestic Partner Coverage Mandated to Employers with state contract of $100,000 Plus. 2007 is the first year that employers with state contracts of $10,000 or more must provide the same benefits to domestic partners as their employeesÕ spouses receive.

HARASSMENT, DISCRIMINATION AND 'EQUAL EMPLOYMENT OPPORTUNITY' LAW NEWS
Retaliation Becomes the New Claim De Jour - The US Supreme Court held that a jury will determine whether reassignment of duties can be considered retaliatory discrimination within the scope of Title VII , even when the employee was not demoted nor terminated The Court defined retaliation as Òmaterially adverse to a reasonable employeeÓ which is expected to confuse juries and increase litigation. Scary! The California Supreme Court extended discrimination to include violence and retaliation based on race. And a California appellate court confirmed that stripping an employee of a supervisory position, threatening to terminate his/her alternative work schedule, barring him/her from completing management courses, calling him/her a troublemakers in front of others, lowering the personÕs rank for promotion, and not telling him/her of information or meetings is retaliation. (No surprise!) The DFEH Sends A Valentine - Valentine Day will likely mark the effective date of the NEW regulations on sexual harassment training for employers with over 50 employees now at the Office of Administrative Law for approval.

Undocumented Workers: No Relief For 'No Match Letters' - Federal regulations enacted in 2006 allow only 63 days following a social security letter indicating there is a discrepancy (a Òno-match letterÓ) before terminating the employee or facing liability under Immigration law. Discrepancies will be considered resolved only if the employer verifies with the Social Security Administration (SSA) or the Department of Homeland Security that the employee's name matches a number assigned to that name in SSA's records, and the number is valid for work or is valid to work in the United States.

WORKERS' COMPENSATION AND DISABILITY DISCRIMINATION
More Disability Discrimination Lawsuits Filed As Work Comp Reform Reduces Comp Claims: Both civil law and workersÕ compensation law allow failure to accommodate and other discrimination claims proceed in civil court separate from the worker compensation proceeding. Two cases before the California Supreme Court may (or may not) support summary judgment motions to end

(More Disability Discrimination Lawsuits Filed As Work Comp Reform Reduces Comp Claims, continued) disability discrimination cases before trial by jury. At issue: Should the employee be required to prove that he/she was able to perform the essential functions of the job with or without accommodation or should the employer to prove that the employee was not able to perform.Lessons learned from recent cases decided at the appellate level include:
  • Employees have two separate claims: the failure to accommodate or engage in the good faith interactive process and discrimination
  • An employer does not have to make the work comp claimantÕs temporary light duty job while the employee recovers into a permanent or regular position and there is no implied regular position created.
  • Employers cannot speculate that an employee will be re-injured by returning to full duty after a doctorÕs approval (absent other facts).
  • Strict policy that an employee must return to work Ò100%Ó recovered is per se discriminatory because the policy doesnÕt evaluate a particular employeeÕs condition with the job he/she holds or the reasonableness of the possible accommodation
  • DonÕt rely on work comp doctorÕs lingo (or your comp adjustor) to make accommodation decisions.
  • Communicate with the employee directly, and often.
  • Advise employees (in writing) of the rules to maintain employment while out on disability, on light duty or performing a modified job, and the consequents of not following the rules.
  • Document the efforts made in accommodating the employee, including dates and times of meeting.
  • Put all offers of accommodation to the employee in writing.
LEAVES OF ABSENCE UNDER FLMA/CFRA
Employee Allowed To Return On His/Her Doctor's Release - Accept the employeeÕs doctorÕs note when he/she returns to work from a leave of absence covered by FMLA/ Once back to work, the employer may require a fitness for duty as long as employee shows he/she is unable to perform the work. Then begin the interactive process. DonÕt skip steps.

Termination Allowed Despite FMLA/CFRA Leave - An employee is not protected from termination simply by being on a FMLA/CFRA leave of absence if the termination was legitimate discipline in respond to policy violations, per new California case. The employer will still have to show by the Ò50% plus testÓ that the employee violated company policy, and that the termination was reasonable under the circumstances.

WRONGFUL TERMINATION AND RELATED DISPUTES
Keep It Simple In 2007 - Be Clear About At Will when Offering Employment (And In All Your Policies) California Supreme Court ruled this year that an offer letter containing the phrase "your employment is at will," which is read, accepted, and signed by an employee is clear enough to support at will employment and termination without cause, and additional language in the letter defining "at will" to mean the employer had the right to terminate employment "at any time" was not confusing.

TRADE SECRETS, UNFAIR COMPETITION AND ARBITRATION AGREEMENTS
Expanding Territory in 2007? Ensure New Hires in Other States Follow that StateÕs Non-Compete Laws. 2006 cases confirmed that non-compete clauses are unenforceable in California, although trade secrets may be protected by agreement. Difficulties arise when California companies expand to sell goods or provide services in other states, and hire from the ÒcompetitionÓ or hire employees who worked for out of state companies in California. Determine from your new hire if he/she signed a non-compete agreement and know the rules in that state regarding restrictions on competition.

FYI: New Law extends the time limit for filing a request to arbitrate under the arbitration agreement if an employee files a lawsuit although he/she is subject to binding arbitration. The time limit begins to run again when it is determined that the employee is required to arbitrate

CHANGES IN THE NEW YEARÉ.
I am pleased to announce that I have joined McMillan and Shureen, an established Santa Rosa law firm so that I can offer more broad-based services. My new contact information is:

Valorie Bader, Esq. McMillan & Shureen LLP 50 Santa Rosa Avenue, Fifth floor Santa Rosa, CA 95404-4952 (707) 525-5405 (voice) (707) 576-7955 (fax) Valorie.Bader@McMillanShureen.com