California Developments

Ninth Circuit Withdraws Vasquez, Punts to California Supreme Court on Dynamex Retroactivity

On July 22, 2019, the Ninth Circuit withdrew its recent decision in Vazquez v. Jan-Pro Franchising International, Inc., and ordered that it would certify to the California Supreme Court the question of whether the worker classification test articulated in Dynamex Operations West v. Superior Court applies retroactively. READ MORE

It’s Heating Up: Several California Cities Prepare For Mid-Summer Minimum Wage Increases

We are halfway through 2019, and while many employees prepare for summer vacation, California employers in various cities should brace themselves for an additional round of minimum wage increases on July 1, 2019.

Another raise, already?

As you may recall, on January 1, 2019, California raised the statewide minimum wage rate to $12.00 per hour for employers with 26 or more employees, and $11.00 per hour for employers with 25 or fewer employees. And the California minimum wage is set to increase to $15.00 per hour for all employers by January 2023. READ MORE

AB 5 and AB 71: CA Legislature Dukes It Out Over Dynamex and Borello

The battle between Dynamex and Borello continues. Two competing bills – Assembly Bill 5 (“AB 5”) and Assembly Bill 71 (“AB 71”) – each seek to codify the respective worker classification tests. On May 29, 2019, the California State Assembly overwhelmingly passed AB 5, a bill seeking to codify Dynamex Operations West, Inc. v. Superior Court of Los Angeles, which adopted the three-factor “ABC” test to determine a worker’s classification for wage order claims. Now the bill is headed to the state Senate. Meanwhile, AB 71, a bill seeking to codify S.G. Borello & Sons, Inc. v. Dept. of Industrial Relations, has thus far not enjoyed the same success. READ MORE

Not Your Call: California Employers May Pursue Damages for Employees’ Illegal Recordings

In the age of smartphones, virtually everyone has a recording device at his or her fingertips—including employees. This can present challenges in the workplace. For example, smartphones and other technology enable employees to secretly (read: illegally) record business meetings, disciplinary discussions with HR, and interactions with other employees. Not only does this violate privacy rights and trust, it also risks disclosing confidential company or employee information. Fortunately, employers are not without a remedy. California’s privacy laws offer protection against illegal recordings by employees. READ MORE

Ninth Circuit “Cleans House” in Vazquez v. Jan-Pro Decision by Holding ABC Test Applies Retroactively and Opining on Its Effect on Franchisors

On May 2, 2019, the Ninth Circuit in Vazquez v. Jan-Pro Franchising Int’l, Inc. held that the California Supreme Court’s 2018 decision in Dynamex Operations West v. Superior Court applied retroactively. Dynamex adopted the “ABC” test for independent contractor classification for claims arising under California’s Wage Orders. For those claims, an employer must show that all three prongs of the ABC test are met to justify independent contractor status. For information on Dynamex’s adoption of the ABC test, read our prior coverage here. READ MORE

“Judges Are Appointed For Life, Not For Eternity”: SCOTUS Rules That Judge’s Vote in Equal Pay Case Does Not Count Due To Judge’s Passing

In April 2018, an en banc Ninth Circuit held in Rizo v. Yovino that an employer cannot justify a wage differential between male and female employees under the Equal Pay Act by relying on prior salary. Before the Ninth Circuit published its decision, though, Judge Stephen Reinhardt passed away. On February 25th, the U.S. Supreme Court vacated the Ninth Circuit’s decision, reasoning that the appellate court should not have counted Reinhardt’s vote because he passed away before the decision was issued. Instead, the Ninth Circuit should not have released the opinion. READ MORE

Money for Nothing? On-Call Checks For Free: California Court Says Employers Must Pay Employees For Certain On-Call Scheduling Requirements, Even If Employees Are Not Called Into Work

A California Court of Appeal recently issued an order in Ward v. Tilly’s, Inc. finding that certain on-call scheduling practices trigger “reporting time pay” requirements even when the employee does not actually come into the work site. READ MORE

What We May See from the California Supreme Court in 2019

2018 saw some major developments in employment law, particularly in California. The California Supreme Court embraced the ABC test for independent contractors in Dynamex, and rejected the de minimis doctrine for Labor Code claims in Troester. While 2019 has already brought legislative changes through the #metoo laws effective January 1, attention should also be on cases before the California Supreme Court. These cases may present new challenges for all employers, but particularly for media companies and employers doing business across state lines. The Court’s decisions in these cases have the potential to increase employers’ exposure to liability. We highlight some such cases here. READ MORE

Making a List and Checking It Twice – Key Employment Considerations For The New Year

You may be asking yourself: How is it already almost 2019?! With the New Year fast approaching, for those employment law enthusiasts out there, here are some legal issues that you want to keep in mind as you look back on 2018 and forward to 2019:

1. Compensation

Year-End Bonuses: Employers distributing holiday bonuses, holiday gift cards, year-end merit bonuses, and other types of compensation to nonexempt employees should consider whether the compensation must be included in a nonexempt employee’s “regular rate” of pay when calculating overtime. The Code of Federal Regulations carves out some specific types of pay that need not be included in an employee’s regular rate of pay. For example, Section 778.211 excludes purely discretionary bonuses and section 778.212 excludes gifts for Christmas and other special occasions.  So, an employer giving employees gift cards for the holidays or other special occasions is not required to incorporate the value of those gift cards into an employee’s regular rate of pay as long as the amounts “are not measured by or dependent on hours worked, production, or efficiency.” See 29 C.F.R. § 778.212(a); 29 U.S.C.A. § 207.

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