• Decking The Halls - Employment Law Posters
• Upping The Ante - The California Minimum Wage To Increase In '07 And '08
• No Ordinary Ordinance - Mandatory Paid Sick Leave For Employees In San Francisco
• Sexual Harassment Training - Got 50?
• Exempt Or Non-Exempt: That Is The Question
• Poor Performer Lawfully Terminated Upon Returning From Medical Leave
• Broad Definition Of "Supervisor" Hits Unions Hard
• Doing The Math - Paystub Corrections

Decking The Halls – Employment Law Posters

Looking for some new holiday décor? The California Department of Fair Employment and Housing ("DFEH") is now required by law (A.B. 1806) to make copies of its employment discrimination poster, as well as its sexual harassment information sheet, available online. Employers are required to place the poster in a prominent and accessible location in the workplace and must distribute the sexual harassment information sheet in a manner that ensures distribution to each employee. The poster and information sheet are available for download at http://www.dfeh.ca.gov/Publications/postersemp.asp.

Upping The Ante – The California Minimum Wage To Increase In '07 And '08

California is hiking its minimum wage rates in 2007 and 2008. The new wage floors are $7.50 per hour effective January 1, 2007, and $8.00 per hour effective January 1, 2008. These increases will also affect the minimum pay for certain exempt employees. For example, employees classified as exempt based upon the executive, administrative, or professional exemptions, whose salary requirements are tied to the minimum wage, must be paid at least $31,200 (in 2007) in addition to meeting the other requirements of the exemption. Similarly, the minimum hourly rate of pay for an exempt computer employee also increases effective January 1, 2007 to $49.77. (This rate is adjusted every year.)

No Ordinary Ordinance – Mandatory Paid Sick Leave For Employees In San Francisco

San Francisco voters recently passed a ballot measure (Proposition F, the "Sick Leave Ordinance") that requires employers to provide paid sick leave to their employees. The new law, which takes effect on February 5, 2007, applies to employees working in San Francisco County, including part-time and temporary employees. The mandatory paid sick leave, which employees are eligible for after 90 days of employment, must accrue at a minimum rate of one hour for every 30 hours worked. Sick leave is, however, capped at 40 hours for "small businesses" (under 10 employees) and 72 hours for larger employers. Employees may use the paid sick leave to care for siblings, grandparents, grandchildren or a person designated by the employee, as set forth by the ordinance. The ordinance also mandates posting and recordkeeping requirements. In terms of enforcement, the law allows both administrative fines and private lawsuits, including by individual employees.

Because of the new mandatory paid sick leave law, it is recommended that employers:

• Examine their current paid time off or sick leave policy to determine whether it matches the requirements of the new law;

• Review their recordkeeping policies to ensure they are consistent with the requirements of the new law; and

• Ensure that they have posted the mandated notices in the required languages (the San Francisco Office of Labor Standards Enforcement is preparing the notice).

San Francisco intends to issue guidance regarding the new ordinance next month. Stay tuned for more details.

Sexual Harassment Training – Got 50?

Recent amendments by the California legislature and regulations issued by the Fair Employment and Housing Commission ("FEHC") clarify the requirements for compliance with mandatory sexual harassment training.

Which Employers Must Provide Training?

Sexual harassment training must be provided by employers doing business in California who employ at least 50 employees (including full and part-timers) or contractors for each working day during any 20 consecutive weeks in the current or preceding calendar year. Employees and contractors who work or reside outside California are counted toward the 50 threshold.

Who Must Receive Training?

A.B. 2095 amends Government Code section 12950.1 to require training only for supervisors located in California. Supervisors who must receive training include those individuals who have authority to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or the responsibility to direct them or to adjust their grievances, or effectively to recommend that action.

Who Must Provide The Training And What Must It Entail?

Subject to specified requirements, sexual harassment training may be conducted through classroom training, e-learning (computer-based training) or by webinar (live internet-based training). Whatever form it takes, however, the training must involve a "Subject Matter Expert," which is defined as an individual with legal education coupled with practical experience, or substantial practical experience in training in harassment, discrimination and retaliation prevention. In terms of substance, the training must include questions that assess learning, skill-building activities, hypothetical scenarios, and discussion questions. The Allen Matkins labor and employment team has extensive experience providing sexual harassment training.

When Must The Training Occur And How Must It Be Documented?

Each supervisor must receive at least two hours of training once every two years. The two hours need not be consecutive, so long as each segment is no less than half an hour. New supervisors, or businesses that subsequently meet the 50-count threshold, must comply with the training requirements within six months. Employers must retain records documenting the training for a minimum of two years. The records must include the name of the supervisor and trainer, the date of the training and the type of training received.

Exempt Or Non-Exempt: That Is The Question.

California has experienced an enormous surge in class action wage and hour lawsuits. One heavily litigated issue is whether a particular group of employees was properly classified as exempt. The answer to this question can differ under federal and California law, as a recent case by the Ninth Circuit reveals. Farmers Ins. Exch. Claims Representatives' Overtime Pay Litig.

In the Farmers case, the Ninth Circuit handed employers a decisive victory, holding that 2,000 current and former insurance claims adjusters were exempt from the overtime requirement of the federal Fair Labor Standards Act. The Ninth Circuit concluded that claims adjusters performed the requisite duties to qualify for the administrative exemption. Among other important tasks, they exercised discretion in determining whether a loss was covered, setting reserves, deciding who is to blame for a loss, and negotiating settlement with the insured and opposing counsel.

Just a few short years ago, in 2001, however, the California Court of Appeal held that claims adjusters were non-exempt under California's wage and hour law. Bell v. Farmers Ins. Exch. In Bell, the court of appeal analyzed the applicability of California's administrative exemption using a framework known as the administrative/production dichotomy. That dichotomy asks the question: are the duties performed by the claims adjusters directly related to management policies or the general business operations of the employer (exempt work), or do the duties involve producing commodities, goods, or services (non-exempt work). The court of appeal found that their work fell on the "production" side of the dichotomy because the claims adjusters actually performed the day-to-day business of claims handling. The court was not influenced by the fact that some of the adjusters' functions (such as determining coverage, setting and/or recommending reserves, estimating losses, providing risk advice, and identifying potential fraud) directly impacted the employer's business operations.

Ultimately, the Bell and Farmers decisions underscore the importance of properly classifying employees under both federal and California law, as this will continue to be the focus of plaintiffs' class action attorneys for many years to come.

Poor Performer Lawfully Terminated Upon Returning From Medical Leave

In Neisendorf v. Levi Strauss & Co., the California Court of Appeal recently ruled that Levi Strauss & Co. ("Levi") did not violate the California Family Rights Act ("CFRA") when it terminated an at-will employee ("Neisendorf") the day that she returned to work from a 14-week medical leave.

Neisendorf began a leave of absence under the CFRA and the federal Family Medical Leave Act ("FMLA") shortly after receiving a negative performance review. At the end of her leave, Neisendorf was medically cleared to return to work on the condition that she receive numerous accommodations. Levi granted the accommodations provided that Neisendorf address the performance deficiencies set forth in her performance review. Neisendorf was subsequently reinstated to her former job at the same level of pay and benefits. On her first day back, Neisendorf met with her supervisor but refused to take responsibility for the performance deficiencies identified prior to her leave. Accordingly, Levi terminated her employment.

Neisendorf filed suit, claiming, among other things, that her termination violated the CFRA and the California Fair Employment and Housing Act ("FEHA"). Most of her claims were dismissed, including her claims of gender and age discrimination, but her claims for disability discrimination in violation of the FEHA and retaliation for taking a medical leave under the CFRA proceeded to trial. On appeal, the court of appeal affirmed the jury's finding that Neisendorf was not terminated in retaliation for having taken leave under the CFRA and that she was not a "disabled person" entitled to the FEHA's protection. While an employer's duties under the FEHA include extending reasonable accommodations to an employee if reasonable accommodations will enable the employee to perform his or her essential duties, there is no similar provision in the CFRA requiring an employer to provide reasonable accommodation to an employee returning from CFRA leave. Because Neisendorf was not eligible for FEHA protection (as she was not a "disabled person"), Levi had no accommodation obligation to Neisendorf. The court of appeal also concluded that an employee who requests CFRA leave or is on leave has no greater right to reinstatement, or to other benefits and conditions of employment, than an employee who remains at work. Thus, Levi's legitimate, nondiscriminatory reason for terminating Neisendorf, which was unrelated to her CFRA leave or her alleged disability, eliminated any obligation that Levi might have had to reinstate her.

Broad Definition Of "Supervisor" Hits Unions Hard

Under the National Labor Relations Act ("Act"), who is, and is not, a "supervisor" is extremely important, as supervisors are excluded from collective-bargaining units, are not eligible to vote in an election, are not covered by the anti-discrimination provisions of the Act, cannot petition to remove a union and are considered the legal agents of the employer. After years of battling between the courts and the National Labor Relations Board ("NLRB"), the NLRB recently issued a crucial decision clarifying the definition of supervisor.

The NLRB ruled on three cases, collectively known as "Kentucky River," but the lead case, Oakwood Healthcare, Inc., clarified the definition. The definition of supervisor has two prongs. First, a supervisor must have the authority to "hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or responsibly to direct them, or adjust their grievances," or the authority to effectively recommend that others carry out such action. Second, a supervisor must exercise that authority by using his or her "independent judgment" in more than a "routine or clerical" nature. In Oakwood, the NLRB found that permanent charge nurses regularly assigning hospital personnel to individual patients met the definition of supervisor under the Act. Oakwood clarified the definition of "assign" others, "responsibly to direct," and "independent judgment" as follows:

• Assign: "[T]he act of designating an employee to a place (such as a location, department, or wing), appointing an employee to a time (such as a shift or overtime period), or giving significant overall duties, i.e., tasks, to an employee."

•  Responsibly to direct: The supervisor must be accountable for the performance of the employee "such that some adverse consequence" may befall the supervisor if the employee does not perform.

• Independent judgment: The individual must "act free of others' control and form an opinion by discerning and comparing data, such that his or her actions are not dictated or controlled by detailed instructions."

With respect to individuals who are supervisors only a portion of the time, the NLRB declined to adopt a strict numerical definition of what portion of time an individual has to perform such duties to qualify as a supervisor. However, it did note that individuals serving in a supervisory role for at least 10-15% of their total work time had previously been found to be supervisors.

Organized labor is not pleased with the Oakwood case, as it reduces the class of individuals potentially subject to union organizing and union representation.

Doing The Math – Paystub Corrections

Under California law, employers are required to provide their employees, either semi-monthly or at the time wages are paid, an itemized wage statement that must delineate (among other things) the total hours worked by the employee during the pay period. This law has recently been amended by A.B. 2095, and starting January 1, 2007, overtime hours worked during a current pay period may be itemized as corrections on the paystub for the next regular pay period. Any corrections set out in a subsequently issued paystub must state the inclusive dates of the pay period for which the employer is correcting its initial reporting of hours worked. For employers subject to a collective bargaining agreement ("CBA"), however, the CBA should be reviewed before implementing this approach. If the CBA requires overtime hours to appear on immediate paystubs, the employer must comply with the CBA.
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