Employers Should Act Now to Avoid Potential Data Minefields: The OFCCP’s New Proposed Rules for Collecting Compensation Data from Federal Contractors

On August 8, 2014, the Office of Federal Contract Compliance (“OFCCP”) proposed new annual reporting requirements for federal contractors and subcontractors.  The proposal requires additional pay information and will become effective in early 2015, unless the OFCCP decides to amend them.

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Seeking Credit for Deferred Commissions? You Might Get Declined

Last week, the California Supreme Court issued its decision in Peabody v. Time Warner Cable, Inc., deciding that employers may not apply commission payments to earlier pay periods for the purposes of establishing that an employee meets the minimum wage component under the commissioned employee exemption.

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From D-Day to Afghanistan: Honoring Our Veterans by Reemploying Them

Seventy years ago, on June 6, 1944, the Allies’ liberation of Europe began with D-Day. Anyone who has had the privilege to travel to Saint-Laurent-sur-Mer in France and walk Omaha Beach and the surrounding area is struck by the incredibly steep and intimidating terrain faced by anyone approaching from the sea. Reentering the civilian workforce after completing military service in Iraq or Afghanistan should pose no such challenge. Read More

Sick Employees in New York City? There’s an Expanded Sick Leave Ordinance for That

Late last month, New York City Mayor Bill de Blasio signed amendments expanding the scope of the City’s Earned Sick Time Act. Starting April 1, 2014, all covered employees must begin accruing earned sick time. The amendments also imposed several other material changes: Read More

Get Paid for Getting Dressed? Supreme Court Clarifies “Changing Clothes” Under the FLSA

Updating a case we discussed last month, in Sandifer v. United States Steel Corp., No. 12-417 (January 27, 2014), the United States Supreme Court last week clarified the scope of Section 203(o) of the FLSA concerning which donning and doffing activities employers and employees can bargain to exclude from compensable time in collective bargaining agreements. In the process, the high Court also unanimously agreed upon which activities constitute “changing clothes” in regards to Section 203(o). Read More

If You Fire Me Without Cause, Can I Ignore My Non-Compete And Steal Your Clients?

In the decades since Post v. Merrill Lynch, Pierce, Fenner & Smith, 48 N.Y.2d 84 (1979), in which the New York Court of Appeals concluded it would be unreasonable to enforce a non-competition agreement requiring forfeiture of compensation against an employee terminated without cause, New York courts have struggled with articulating a clear rule as to whether an employee’s post-employment restrictive covenants are enforceable upon a termination without cause and, if so, when. Read More

Bark and Bite: Best Practices for Your Company’s Off-the-Clock Policy

Most employers maintain a written timekeeping policy stating that non-exempt employees should accurately record their time worked. Yet many employers are still facing class action lawsuits alleging off-the-clock claims. Below we detail some key practices companies may consider to strengthen their timekeeping policies and defend against off-the-clock claims.

  • Policy:  Maintain a timekeeping policy that makes the company’s expectations crystal clear, including that the company (1) does not tolerate off-the-clock work; (2) requires employees to immediately report policy violations to HR; and (3) disciplines (including terminates) employees who work off-the-clock or allow others to do so.
  • Training:  Train non-exempt employees and their managers on the timekeeping policy and keep records of the training completion.
  • Reminders:  Issue regular reminders regarding the timekeeping policy and/or post a reminder in the break room that employees are not allowed to work off-the-clock and must report policy violations.
  • Check-ins:  Have managers, HR and/or auditors periodically check in with employees to confirm they are not working off-the-clock.
  • Certification:  Require employees to certify or acknowledge that their time records are accurate. If the time records are inaccurate, require employees to immediately notify their manager or HR.
  • Take complaints seriously:  Thoroughly investigate complaints, discipline/terminate policy violators and pay for reported off-the-clock work.
  • Remote access:  Don’t give non-exempt employees remote access to company systems or e-mail, or make it clear that they must record any such remote access time.

See’s Candy Shops, Inc. v. Superior Court: California Appellate Court Confirms Application of Federal Rounding Standards in California

Many employers systematically round employee time punches to the nearest tenth of an hour. For example, if an employee clocks in at 9:58 a.m., the time is rounded up to 10:00 a.m.; and likewise if she clocks in at 10:02 a.m., her time is rounded down to 10:00 a.m. Under federal law, rounding policies are lawful if they are neutrally applied and do not systematically under compensate employees. While this standard was approved by the California Division of Labor Standards and Enforcement, until recently, no California court or statute specifically addressed the issue.

However, on October 29, 2012, the California Court of Appeal for the Fourth Appellate District in See’s Candy Shops, Inc. v. Superior Court confirmed that the neutral rounding standard adopted by federal law and the Department of Labor Standards and Enforcement is appropriate under California law. Thus, under See’s Candy, California employers may maintain lawful rounding policies if the rounding does not consistently result in a failure to pay employees for time worked. An example of a potentially unlawful rounding policy is one in which the employer always rounds time down.

Also of note, in approving the federal rounding standard, the See’s Candy opinion rejected the plaintiff’s reliance on California Labor Code section 204. Specifically, the court emphasized that Section 204 is solely a timing requirement as to when wages must be paid, and does not create any substantive right to wages.

You can read the decision here.

Post-Brinker Class Certification Decisions

On April 12, 2012, the California Supreme Court in Brinker Restaurant Corp. v. Superior Court, 53 Cal. 4th 1004 (2012) issued a critical decision regarding break and off-the-clock class claims and the standards governing an employer’s obligation to provide breaks under California law. Since the Supreme Court issued its opinion, employers have been eagerly awaiting its application by the lower courts in determining the suitability of class treatment for break and off-the-clock claims. Below is a brief summary of post-Brinker class certification decisions that are helpful to employers.

Benton v. Tanintco, BC349267, Los Angeles County Superior Court: On May 2, Judge Wiley denied certification to a class of technicians who were allegedly misclassified as independent contractors. The court found that individualized issues predominated on the break and overtime claims and that there was no single way to determine liability. The court noted that there were no uniform break or overtime policies and that the declarations the employer submitted demonstrated that workplace experiences varied drastically. The court further stated that the plaintiff’s 43 “substantively identical…lawyer-drafted” declarations should be taken “with a grain of salt” and that at most, they established similar work conditions for only 6% of the putative class. Judge Wiley also reiterated that the Brinker concurrence, which only commanded two votes, is not the law.

Kimani v. Healthcare Investments, Inc., Case No. BC432360, Los Angeles County Superior Court: On May 11, Judge Strobel denied certification to a class of nurses on plaintiffs’ claim that the nurses were not provided a second meal break when working double shifts. The court had previously denied certification of plaintiffs’ overtime, first meal break and rest break claims. In analyzing the remaining double shift/second meal break claim and the derivative wage statement, final pay, unpaid wages and penalties claims, the court cited Brinker and found that determining liability would require individualized inquiries as to each class member and each double shift worked. Accordingly, individualized issues predominated, rendering class treatment inappropriate.

Peters v. Wells Fargo Bank NA, Case No. BC429408, Los Angeles County Superior Court: On June 20, citing Brinker, Judge Palazuelos denied certification of a class of personal bankers, finding that without a classwide policy impacting overtime and breaks, individualized issues predominated on plaintiff’s break and overtime claims and related off-the-clock allegations.

Upcoming Decisions

After granting review of Brinker, the California Supreme Court also granted review of many other class certification decisions involving break claims. See Brinkley v. Public Storage, Inc., Tien v. Tenet Healthcare, Inc., Hernandez v. Chipotle Mexican Grill, Inc., Faulkinbury v. Boyd & Assoc., Bradley v. Networkers Int’l LLC, Brookler v. Radioshack Corp. and Flores v. Lamps Plus. These cases are in the process of being sent back to the appellate courts for reanalysis in light of Brinker and we can expect decisions on these cases in the coming months.