On September 18, 2019, California Governor Gavin Newsom signed into law A.B. 5, solidifying a tighter standard of rules for classifying a worker as an independent contractor. The new standard, known as the Dynamex standard, codifies and expands the earlier California Supreme Court decision, Dynamex Operations West, Inc. v. Superior Court of Los Angeles. It replaces the former Borello test, and puts in place a more simple three-pronged ABC test. The significant effect is that many workers in California will now be classified as employees instead of independent contractors (also informally known as “1099” workers). This change is one of the most significant disruptions to California employment law in decades. The law will take effect on January 1, 2020.Continue reading
On September 18, 2019, California Governor Gavin Newsom signed into law A.B. 5, codifying a tighter standard of rules for classifying a worker as an independent contractor. The new standard, known as the Dynamex standard, codifies and expands the earlier California Supreme Court decision, Dynamex Operations West, Inc. v. Superior Court of Los Angeles. It replaces the former Borello test, and puts in place a more simple three-pronged ABC test. The significant effect is that many workers in California will now be classified as employees instead of independent contractors (also informally known as “1099” workers). This change is one of the most significant disruptions to California employment law in decades. The law will take effect on January 1, 2020.
The new law is convoluted, and has numerous exceptions for various professions, as discussed in further detail below. To further complicate matters, the law codifies Dynamex for purposes of claims made under the California Labor Code, Unemployment Insurance Code, and wage orders, but curiously does not mention the California Government Code, under which workers may seek redress for harassment and discrimination, among other things.
In addition, the newly created exemptions to the ABC test will apply “retroactively to existing claims and actions to the maximum extent permitted by law.”
In order to ensure that your company’s workers are properly classified (in order to avoid substantial fines and expensive misclassification lawsuits), contact a qualified employment law attorney as soon as possible to ensure you are complying with the law and following the new rules.
What Is the Potential Impact of This Change?
According to the LA Times, “State Capitol Democrats and organized labor say their new ‘gig’ law will correct the misclassification of 1 million California workers who are falsely deemed independent contractors.”Continue reading
On September 3, 2019, Governor Gavin Newsom signed Senate Bill (SB) 778 to extend the deadline for employers to complete their Sexual Harassment Prevention Training. The deadline has been extended by a full year, from January 1, 2020 to January 1, 2021. The new bill also allows covered employers who have provided anti-harassment training in 2019 to wait two full years before providing refresher training.
The purpose of the bill is to give employers sufficient time to provide these trainings in a manner that values their importance and provides a greater impact towards improving equality in the workplace. A recent professional association survey found that over 80% of Human Resources and Operations Managers are aware of the new training requirements, but had not booked the training for their employees nine months into 2019.Continue reading
On September 4, 2019, Jennifer Grady, Esq. was featured on episode 31 “Legally Speaking: Handling Tough Legal Situations” of The AutoVitals Digital ShopTalk Radio, with host Tom Dorsey, to discuss a myriad of legal situations that can arise in a workplace from Sexual Harassment to record-keeping and what new business owners and employers need to know to be successful.Continue reading
On August 9, 2019, Jennifer Grady, Esq. was featured on episode 456 of The Remarkable Results Radio, with host Carm Capriotto, to discuss Sexual Harassment in the workplace and what employers can do to prevent it.
Key Talking Points
During the radio show, Jennifer and Carm discussed important points on sexual harassment in the workplace including:Continue reading
As the #MeToo movement has grown over the past two years, and claims against powerful individuals continue to surface in the media and on social media, employers and companies need to adjust their response polices as one thing is clear: sexual claims are very real, very expensive, and very destructive.
The following cases are real-world examples of how sexual harassment claims can cost employers in terms of time, money, and employee morale, and can cause pain and distress to employees.
- A recent claim against the popular P.F. Chang’s China Bistro chain cost the company $1 million in response to two employees claims that they were repeatedly sexually harassed and were subjected to a hostile work environment.
- Two female employees at a California winery were subject to repeated sexual harassment by the winery’s general manager and then subsequently retaliated against by the company. A Los Angeles jury awarded $11 million dollars to the two women. Each woman received $1 million for past emotional distress; $1.5 million for future emotional distress and $3 million in punitive damages. In addition to the $11 million dollars to the women, their attorneys will also receive their attorney’s fees.
- Ford announced it would pay up to $10.1 million to settle a racial- and sexual-harassment investigation at two Chicago plants.
While immigration enforcement and oversight have occurred under the purview of all past presidents, the Trump Administration has publicly made them a leading policy priority. Immigration raids and detentions at the border are the most visible aspects of this policy, but administrative oversight of employment documentation has also increased and will likely have the greatest impact on the majority of employers. One area where this is especially true is with Department of Homeland Security (DHS)’s oversight of employer’s I-9 forms.
Worksite immigration enforcement rose drastically in the fiscal year 2018 compared to the previous year, following a commitment made by U.S. Immigration and Customs Enforcement (ICE) in late 2017 to step up its worksite enforcement efforts across the country.
All worksite enforcement categories surged by 300 to 750% over the previous fiscal year. Here are some surprising numbers:
• 6,848 worksite investigations in 2018 compared to 1,691 in 2017;
• 5,981 I-9 audits in 2018 compared to 1,360 in 2017;
• 779 criminal arrests compared to 139 in 2017 (including arrests and indictments of managers); and
• 1,525 administrative worksite-related arrests compared to 172 in 2017.
What is an I-9 Form?
The I-9 Form is an instrumental part of the new employee on-boarding process, and should be completed within the first 3 days of hire. This form is used to verify the identity and employment authorization of individuals hired for employment in the United States. All U.S. employers must ensure proper completion of Form I-9 for each individual they hire for employment in the United States, including both citizens and non-citizens. Failure to maintain proper I-9s can lead to a variety of monetary fines or even criminal penalties if an employer intentionally misrepresents I-9 information.
What Can Go Wrong? During an Audit
On its face, the I-9 form appears to be a fairly simple and straightforward document. However, many employers fail to accurately input all required documentation, fail to obtain proper employee documentation, or fail to properly store and maintain I-9 records. Any of these oversights can lead to potentially costly fines in the event of an audit. Our clients who have been officially audited told us that ICE reviewed every line of an I-9 form for accuracy and will issue fines for every entry that is inaccurate. Therefore, it is vital that employees responsible for handling I-9 documentation be fully trained with respect to I-9 procedures. For a detailed overview of the I-9 process, see our previous article, 6 Tips for Avoiding Costly I-9 Mistakes. Continue reading
On September 30, 2018, Governor Jerry Brown signed into law S.B. 1343, which now requires that employers with 5 or more employees in California provide 1 hour of sexual harassment and abusive conduct training to non-managerial employees, and 2 hours for managerial employees once every two years. Managerial employees must receive training within 6 months of hire or promotion.
BY WHAT DATE MUST EMPLOYEES BE TRAINED?
All managerial and non-managerial employees must receive training by January 1, 2020. After January 1, 2020, employees must be retrained once every two years. That means that all employees statewide must be retrained again by January 1, 2022.
WHAT IF MY EMPLOYEES WERE TRAINED BETWEEN JANUARY 1 AND DECEMBER 31, 2018?
The law requires that employees be trained during calendar year 2019. According to the recently released DFEH FAQs, employees who were trained in 2018 or before will need to be retrained.
S.B. 1343 requires that the California Department of Employment and Fair Housing (DFEH) make online training courses available on the prevention of sexual harassment and abusive conduct in the workplace. However, DFEH does not expect to have such trainings available until late 2019. Therefore, in order to ensure that your employees receive the required training by January 1, 2020, it is best to schedule training now to secure the availability of a trainer, account for any employee make-up sessions, and to train in multiple sessions to stagger the number of employees who are taken away from work to attend training. Continue reading
Since January 1, 2016, California employers must reimburse employees for use of their personal cell phones for mandatory business purposes. (Cochran v. Schwan’s Home Service, Inc). This ruling affects millions of employers who must update their company policies in order to stay compliant with the new law. While this law has been on the books for over two years now, it appears as though many companies have not addressed this law or made it part of their employee reimbursement practices. Is your company reimbursing its employees for their cell phone call and data usage? Read below for policy suggestions.
What does this mean for employers?
According to Cochran, California employers must indemnify employees for all “necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer.” Unfortunately, even four years after this case was decided, the exact measure of reimbursement is still somewhat unclear. While the court in Cochran determined that employers must consistently reimburse employees a “reasonable percentage,” it did not define what is reasonable. Furthermore, the employer must reimburse the employee even if the employee does not incur any additional expense on his or her cell phone/data plan as the result of using the device for work-related purposes (i.e. if the client has unlimited talk, text, and data plans).
Stay up to date with recent changes to California labor law posters! In order for your business to stay in compliance with these recent changes, the updated posting(s) must be downloaded, printed, and then posted next to your current labor law poster. Remember, labor law posters must be posted in a conspicuous location so that all employees may see them.
1. EDD- Unemployment Insurance, Disability Insurance, Paid Family Leave:
The California Employment Development Department (EDD) has updated its EDD notice regarding Unemployment Insurance, Disability Insurance, and Paid Family Leave. The updated notice reflects a change to the online application platform, as well as formatting changes. The department recommends maintaining updated information, however, this update will not be mandatory until January 1, 2019. The poster revision date is August 8, 2018.
Jennifer Grady, Esq. has been invited to appear as a panelist at the San Diego Global Investment Forum in sunny San Diego, California. This event, which will took place on September 19-20, 2018, is hosted by the San Diego Global Partnership. As part of the panel on “Foreign Direct Investment,” Ms. Grady shared her expertise on immigration options and trends for investors and employees who are relocating to Southern California.
Other panels focused on real estate development and investment, technology and innovation, domestic funding and alternative investment, and city collaboration. Speakers and attendees had the opportunity to network at the welcome cocktail reception on the evening of September 19, and the finale networking reception on September 20. In addition, there was a Development & Innovation tour of San Diego on September 21 for investors interested in an overview of San Diego.
This unique investment-focused event drew attendees from around the globe who recognize San Diego and the greater Southern California region’s incredible growth opportunities over the next ten years. For example, CBRE’s “Americas Investor Intentions Survey” for 2018 recognizes the up-and-coming nature of the region by recognizing that, “the Southern California market ranked number 11 for investment in the US, up from number 17 last year.”
This was the first year for the Forum, which is open to any individual, developer, institution, company, fund, or organization that wants to learn why San Diego is rapidly climbing the economic changes and why they should be looking at San Diego and Southern California as their next investment opportunity.
This two-day forum offers a unique platform to learn from and meet San Diego’s Mega Region innovation, development, business, municipality, political, and thought leaders in one room.
Who should attend?
In California, employees can apply for paid family leave (PFL) benefits administered through the California’s Employment Development Department (EDD). These PFL benefits are funded through employee-paid payroll taxes, and provide eligible employees with six (6) weeks of partial wage replacement. No state-wide law requires that employers offer paid parental leave.
San Francisco, however, has enacted a local ordinance, the San Francisco Paid Parental Leave Ordinance (SFPPLO), which requires that covered employers supplement an employee’s PFL benefits. As of January 1, 2018, the SFPPLO applies to any San Francisco-based employer with 20 or more employees worldwide. Thus, any employer with more than 20 employees would need to offer eligible employees who work in San Francisco with fully paid leave that complies with the SFPPLO and would need to revise its parental policy accordingly. Continue reading
The California Legislature has passed the following labor and employment bills, which will become law effective January 2018.
PRIOR SALARY AND PRIOR CONVICTIONS
Salary History Information
AB 168 prohibits employers from asking job applicants for “salary history information,” which includes both compensation and benefits. But where an applicant “voluntarily and without prompting” discloses salary history information, the employer may rely upon the information in setting the applicant’s starting salary. As a result, questions about prior salary may not be asked in job applications or interviews by an employer or an agent of the employer.
Additionally, AB 168 requires employers to provide the pay scale for a position if the applicant requests it. This bill makes California the first jurisdiction in the country to require that employers provide applicants with the pay scale for a position, upon “reasonable request.”
This bill applies to employers, both private and public, and will become effective January 1, 2018. Continue reading
by Grace Lim-Ayres, Esq.
On July 13, 2017, the California Supreme Court in Williams v. Superior Court (Marshalls of CA, LLC) issued an opinion addressing the scope of discovery in representative actions brought under PAGA (Private Attorneys General Act of 2004, codified in Cal. Lab. Code § 2698 et seq.). The Labor Code Private Attorneys General Act (PAGA) authorizes aggrieved employees to file lawsuits to recover civil penalties on behalf of themselves, other employees, and the State of California for Labor Code violations.
The Williams Court unanimously reversed the trial court’s discovery order denying plaintiff access to statewide contact information for fellow employees of other Marshalls stores. It held that plaintiffs in PAGA actions have access to a broad scope of discovery similar to discoverable information in a class action. The plaintiff is entitled to statewide contact information at the onset of the case to determine which cause of action to plead, and whether a broader representative action is warranted.
In what could be considered another blow to employers in an already employee-friendly state, given the relatively low threshold for pleading, employees may now bring more PAGA claims that are in fact “fishing expeditions”, which will in turn require employers to spend more time defending against them. In addition, it is clear that statewide contact information is relevant and discoverable in a PAGA claim at the outset of the case. Continue reading
Thank you to all of our clients, referral partners, friends, and colleagues who attended The Grady Firm‘s Fifth Anniversary Party on April 6, 2017 at our firm’s Beverly Hills headquarters. We had an amazing time catching up and making new connections! We were humbled by our guests’ outpouring of support, and that many of them braved over two hours of traffic each way (and even a plane ride!) to be part of our special celebration. Our guests were able to make some new connections of their own, and have already started doing business together with their new connections.
During the event, we presented a slide show with the firm’s milestones, which you can view here.
Heartfelt thanks go to Good Heart Catering for graciously catering this event, ProChile Los Angeles for donating bottles of Chilean wine and Pisco, the California Employers Association for donating a $50 visa gift card and webinar ($109) value, and to Tom and Donna Grady for helping before, during, and after the event. Continue reading