California Developments

Federal Overtime Formula Falls Flat — California Supreme Court Adopts DLSE Interpretation for Flat Rate Bonuses

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In a break from federal law, the California Supreme Court clarified in Alvarado v. Dart Container Corp. the proper formula for calculating flat-rate bonuses into overtime pay under California law.  The Court adopted the Plaintiff’s position and held that, for purposes of calculating the per-hour value of a flat rate bonus, the divisor should be the number of nonovertime hours the employee worked in the pay period rather than all hours worked during the pay period.  READ MORE →

Take Out and Classification Take-Aways: Federal Court in California Finds Food Delivery Drivers Are Independent Contractors

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In the first federal court in California to issue a rule on classification of gig-economy workers, the Northern District of California recently concluded that restaurant delivery drivers are properly classified as independent contractors instead of employees under California law.

In Lawson v. Grubhub, Inc., No. 15-cv-05128-JSC (N.D. Cal. Feb. 8, 2018), Plaintiff Raef Lawson worked as a restaurant delivery driver for Grubhub for four months in late 2015 and early 2016.  Grubhub is part of the growing gig-economy, connecting diners to local restaurants through its internet food ordering app.  Lawson brought his claims both in an individual capacity and as a representative action pursuant to the California Private Attorney General Act (PAGA).  The critical question before the court was whether Lawson was an employee or an independent contractor. READ MORE →

California Takes One Step Closer to Imposing Reporting Requirements and Public Shaming for Employer Pay Gaps

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When we last checked in on AB 1209, the Gender Pay Gap Transparency Act, the proposed legislation was making its way through the California Senate. After making a few key amendments, the Senate passed the bill on September 7, 2017. The California Assembly approved the amendments on September 11, 2017, and now the fate of AB 1209 lies in the hands Governor Jerry Brown. READ MORE →

Expanded Protections for Working Mothers in San Francisco

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Effective January 1, 2018, San Francisco will expand available protections for nursing mothers working within city limits. California law currently requires employers to provide lactating employees with a reasonable amount of break time and to make reasonable efforts to provide the employee with a room, other than a bathroom, in close proximity to the employee’s work area to express milk.  Similarly, federal law requires employers to provide a reasonable break time for an employee to express breast milk for one year after the child’s birth in a place, other than a bathroom, that is shielded from view and free from intrusion from co-workers and the public.  Signed into law by San Francisco’s Mayor Ed Lee on June 30, 2017, the “Lactation in the Workplace Ordinance” will expand these requirements for San Francisco employers in the following ways.

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California’s Tightened Regulations on Considering Criminal History in Employment Decisions Take Effect July 1, 2017

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Last year, the California Fair Employment and Housing Council proposed new regulations on an employer’s consideration of criminal history in making employment decisions. Those regulations were approved this year by the Office of Administrative Law after a period of public comment and are due to become effective on July 1.

New Clarification on Adverse Impact Claims READ MORE →

First Dibs: New Ordinance Requires San Jose Employers to Offer Additional Hours “In-House” to Qualified Part-Time Employees before Hiring

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For anyone who missed it, on Monday, March 14th the “Opportunity to Work Ordinance” (the “Ordinance”) went into effect in San Jose.  The Ordinance, which was approved by voters on November 8, 2016, requires employers to offer additional hours to existing part-time employees before hiring externally, either directly or through a temporary staffing agency. Employers must offer the additional hours to employees who have the skills and experience to perform the work.  Whether or not an existing employee has the requisite skill and experience is a determination left to the employer – modified only by the requirement that the employer act in good faith and with reasonable judgment.  Further, an employer need not offer an existing employee additional hours if doing so would require the employer to compensate the existing employee at time-and-a-half or any other premium rate under the law or a collective bargaining agreement.  READ MORE →

Uber Rolls Along, Despite Driver Challenges to its Arbitration Agreement

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Companies operating in the “on-demand” or “gig economy” have enjoyed tremendous success in recent years, as emerging technologies and shifts in consumer tastes have buoyed their growth. These companies span a cross-section of industries (transportation, food delivery, lodging) but have one thing in common: each aims to deliver traditional services more efficiently by connecting consumers directly with service providers.

But as we all know by now, success often begets legal challenges. Take Uber, for example.  The company has faced a thicket of litigation in recent years, most notably related to the question of whether its drivers are employees or independent contractors.

Like many companies in today’s economy, Uber has implemented an arbitration policy as a way to efficiently resolve disputes. Below we recap some of the developments in this area and preview some legal issues that companies will want to monitor in the months ahead. READ MORE →

Not Providing Compliant Rest Breaks in California Could Break the Bank – New Clarifications from the State’s High Court

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Recently, in Augustus v. ABM Security Services, Inc., the California Supreme Court upheld a $90 million award of statutory damages, interest, and penalties against an employer who required employees to remain on-call during rest periods, despite no evidence showing that any employee’s rest period was ever actually interrupted.  This holding has significant implications statewide, and employers in California should promptly review their rest break policies to ensure full compliance.  READ MORE →

Court of Appeal Gives California Employers a Break – but Not a Full Vacation – from PTO Reporting Requirements

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Your employees may spend their time daydreaming about how to spend the vacation hours they accumulate each pay period – and in California, they are entitled to be paid out upon termination for any accrued, unused vacation time or paid time off.  But that doesn’t mean they are entitled to see a breakdown of the monetary value of accrued vacation or paid time off (PTO) on each wage statement, according to a recent ruling from a California state appellate court.  That said, employers still have an obligation to list an employee’s accrued sick leave on pay stubs consistent with California’s sick leave law. READ MORE →

The New Gold Standard: S.B. 1241 Limits Employers’ Ability to Include Non-California Venue or Choice-of-Law Provisions in Contracts with California Employees

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On September 25, 2016, California Governor Jerry Brown signed S.B. 1241 into law, prohibiting employers doing business in the Golden State from requiring California employees, as a condition of employment, to agree to non-California choice-of-law or venue provisions for claims arising in California, either in litigation or arbitration.  Such provisions are frequently found in employment, arbitration, or non-compete agreements.  The new law will be codified as California Labor Code section 925, and will apply to contracts entered into, modified, or extended on or after January 1, 2017.

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