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Essential Employment Law Practices: How to Avoid Getting Sued
Christopher W. Olmsted, Esq.
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
Introduction
Volunteers, students, independent contractors
Exempt employees Meal and rest periods Overtime Travel time Other wage and hour laws Leaves of absences Q & A
Today’s Topics
Who Is NOT Your Employee?
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
Volunteers
Volunteers are not employees. Volunteers intend to donate their services
to religious, charitable, or similar nonprofit corporations without contemplation of pay and for public service, religious, or humanitarian objectives
Work “without contemplation of pay” In-Kind Compensation might count as
contemplation. (e.g. food, shelter, transportation, medical benefits)
“Work therapy”?
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
Volunteers
Volunteers are not employees. Exception: nonprofit providing
commercial services to general public (restaurants, thrift stores) or contract to provide personal services to businesses
Problem: Employee who is also a volunteer No volunteering to do regular work in
same workweek (job description?) Different work likely ok
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
Student Interns – Federal Rules
1) Like School. The training, though it may include actual operation of the employer’s facilities, is similar to training that would be given in a vocational school.
2) Student Benefit. The training is for the benefit of the student.
3) No Displacement. The student does not displace regular employees, but works under close observation of a regular employee.
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
Student Interns – Federal Rules
4) No Advantage. The employer that provides the training receives no immediate advantage from the activities of the trainees or students and, on occasion, his operations may even be impeded.
5) No Job Entitlement. The student is not necessarily entitled to a job at the conclusion of the training period.
6) Agreement. The employer and the student understand that the student is not entitled to wages for the time spent training.
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
Student Interns – California Rules
7) Curriculum. Any clinical training is part of an educational curriculum.
8) No Benefits. The trainees or students do not receive employee benefits.
9) Generic. The training is general, so as to qualify the trainees or students for work in any similar business, rather than designated specifically for a job with the employer offering the program. In other words, on completion of the program, the trainees or students must not be fully trained to work specifically for only the employer offering the program.
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
Student Interns – California Rules
10) Separate Hiring Criteria. The screening process for the program is not the same as for employment, and does not appear to be for that purpose, but involves only criteria relevant for admission to an independent educational program.
11) Clear Ads. Advertisements for the program are couched clearly in terms of education or training, rather than employment, although the employer may indicate that qualified graduates will be considered for employment.
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
Student Intern Tips
Keep It Real. Don’t try to create or fill a “free labor” position.
School Program. In California, the internship should be arranged through a school program that includes internship as part of the curriculum.
Pay. If in doubt, pay minimum wage.
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
Independent Contractors
California EDD Payroll Taxes
Labor Commissioner / DLSE Workers’
Compensation District Attorney
Criminal Sanctions Private Litigants
Your Employees
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
Employee vs. Independent Contractor
Primary Factor: Control over work done
and manner of performance
Secondary Factors: Separate businessNo supervisionSkill Tools, place of workPaid by job/pieceRisk of lossBeliefLength of timeTrainingIntegration
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
Recent Trends
Federal Legislation Safe Harbor Under
Attack California Legislation
More Penalties California Case Law
Independence A Rarity
Exempt Employees
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
Who is Exempt?
Common Categories Executive
Administrative
Professional
Computer Tech
Sales
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
Who is Exempt in California?
1. Salary Test Salary must be no less than 2x
minimum wage Minimum salary for executive,
professional and administrative exemption $2,600/month or $31,200/year
2. Duties Test Engaged primarily in exempt duties
which require exercise of discretion and independent judgment.
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
Nonprofits
Executive Director Administrative
Exemption – HR, accounting
Professional – licensed practitioners
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
Pop Quiz
TRUE OR FALSE? Salary = Exempt Job Title = Exempt Employee Preference = Exempt Got Away With It Before =
Exempt Industry practice = Exempt
FALSE FALSE FALSE FALSE FALSE
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
Practical Solutions
Assume Non-exempt Use Job Descriptions + Actual
Duties Be accurate! (Actual duties and time
spent/duty.) Audit/monitoring Get Legal Advice
Wage and Hour Issues
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
Wage and Hour Laws
California Labor Code Wage Orders (regulations) DLSE opinions and
enforcement manual State court cases
Federal Fair Labor Standards Act (FLSA) DOL regulations Wage and Hour Division
opinions Federal court cases
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
Meal Periods (In General)
When Required? 0-5 hours: no meal period
required 5:01-6 hours: must “provide” one
30 minute meal period, but can be waived by mutual agreement
6:01-10 hours: must “provide” one 30 minute meal period
10:01-12 hours: second 30 minute meal period, can be waived by mutual agreement if first not waived
Must keep accurate time records
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
Meal Periods
Unpaid if: Completely relieved of all duties Free to leave work station At least 30-minutes
On-duty meal period Voluntary written agreement,
expressly revocable Paid (counts as hours worked) Permitted only when the nature of the
work prevents the employee from being relieved of all duty (narrowly interpreted)
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
Meal Periods
Employer Burden To Ensure Meal Period
Employer Obligation To Record Meal Periods
Meal Period Premium (1 hr pay) for Missed Breaks or Insufficient Breaks
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
Enforcement
Federal Department of Labor (DOL)
State Department of Industrial Relations (DIR), Division of Labor Standards Enforcement (DLSE)
Employee lawsuits and class actions
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
How to avoid being sued
Force employees to take meal and rest periods as required by law
Consider IT solution to track hours worked
Have a written policy Acknowledgment form on time cards
Consider using written waivers Combine with 6 hour shifts
Pay Meal/Rest Period Premium when incurred.
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
Rest Periods
10-minutes per 4 hours (or major fraction thereof).
As close to the middle of the 4 hour period as practical
Not needed if less than 3.5 hours worked
Rest period counted as time worked = paid
Missed rest period: “Premium” of
one hour pay at regular rate.
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
Record Keeping Requirements Required to keep accurate records of all hours worked For non-exempt employee, times required daily:
start of work day start of meal period end of meal period end of work day
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
Overtime Premiums–More than 40 hours in one work week (1.5x pay)
–More than 8 hours a day (1.5x pay)
–More than 12 hours in one work day (2x pay)
–First 8 hours of seventh consecutive day of work in any work week (1.5x pay)
–More than 8 hours on the seventh consecutive day of any work week (2x pay)
•Unauthorized overtime
•Nonprofits: unrecorded overtime
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
Overtime (Cont’d)
General rules: determine “work day” no pyramiding of hours each workday separate Holidays, Saturdays, or Sundays
“Regular Rate of Pay” issues Avoid Compensatory Time Off
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
Make Up Time: Overtime Exception
Make up in the same workweek in which the time is missed;
Written request each time (up to 4 weeks in advance);
The time missed must be due to personal reasons of employee;
The time made up must not cause the employee’s work to exceed 11 hours in day or 40 hours in week;
The employer must approve the request; The employer must not encourage or solicit
the request.
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
Furlough For Exempt Workers
General rule: fixed salary, no reductions.
Temporary furlough: Reduction in salary plus reduction in pay acceptable
Other exceptions: Full week absence Pro rata first/last week Full day absence, exhausted
sick plan
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
Travel Time – Rutti v. LoJack
General Rule: Regular commutes not compensable.
Company Vehicles: Commuting in company vehicle not compensable if:
Federal: Pursuant to employer/employee agreement.
State: control/discretion over commute (route, timing, hauling tools or workers, etc.)
“Incidental restrictions” OK.
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
Travel Time Tips
Don’t Control. Avoid controlling when an employee leaves for work, the route he takes, or the activities he must engage in on the way (such as picking up materials, equipment, personnel).
Write It. Create written policies or agreements regarding the use of the vehicles, with care towards avoiding too much control such that commute times are compensable.
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
Travel Expenses
Federal court class action Lewis v. Starbucks
Store manager drove to bank, picked up supplies from vendors, attended meetings.
Mileage not reimbursed. Labor Code 2802 requires
reimbursement for all expenses.
6,000 managers. $3,000,000 settlement.
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
Travel Expenses
Handbook. Ensure handbook provides that all workers are reimbursed for travel expenses.
Procedures. Implement procedures for employees to claim and receive reimbursement for travel. (e.g. expense form to all workers expected to drive their cars for business reasons). Instruct them to sign and turn in the form each month (regardless of whether actual expenses were incurred).
Training. Train managers and supervisors to collect expense reports or receipts from all employees running errands or otherwise using personal vehicles for company purposes.
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
After Hours Work – Rutti v. LoJack
General Rule: Pre- and post-shift activities compensable if “integral and indispensable part of the principal activities for which covered workmen are employed.”
Exception: “De minimus” time/work.
Examples: No: Planning the daily route.Yes: Uploading data from home.
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
Pre- and Post Shift: Cervantes v. Celestica
Facts: waiting in a security line to enter facility before clocking in or out.
Issue: Is time in line compensable? Decision: Maybe.
Employer “controls” employees because they have no choice but to wait in line.
But the de minimus rule might apply (meaning no pay).
Side Issue: Employer liable for temp workers’ pay.
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
Pre and Post Shift Tips
Monitor. Carefully monitor pre- and post- shift activity to ensure that employees are not engaging in off the clock activities without pay (or pay if they are).
Consult with legal counsel to determine whether certain activities may fall under the “de minimus” exclusion.
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
Training Classes
Criteria:
1.Attendance is outside of the employee’s regular working hours;
2.Attendance is in fact voluntary (attendance is not voluntary if the employee is led to believe that present working conditions or the continuation of employment would be adversely affected by nonattendance);
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
Training Classes
Criteria:
3. The course, lecture, or meeting is not directly related to the employee’s job (training is directly related to an employee’s job if it is designed to make the employee handle his job more effectively as distinguished from training him for another job or to a new or additional skill);
Exception to third criteria: Even if the training is clearly related to an employee’s job, voluntary participation outside of working hours need not be compensated if the course corresponds to courses offered by independent bona fide institutions of learning.
4. The employee does not perform any productive work during such attendance.
Employee Contracts
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
Contract Law
California presumption: At will employment
Express contracts Contracts for a stated term Good cause for termination Dispute resolution
(arbitration) Executive /professional /
sales “Implied” contracts
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
Types of Agreements
Trade Secret Agreements / Confidentiality Agreements
Non-Compete and Non-solicitation Agreements
Email/internet waiver of privacy agreements (see above)
Employee inventions / proprietary rights
Who has authority to sign?
Leaves of Absence
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
Leaves of Absence
California Family Rights Act (CFRA)
Family Medical Leave Act (FMLA)
California Pregnancy Disability Leave (PDL)
OthersBasic rights: Protected leave Reinstatement
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
FMLA/CFRA Overview
Who is a covered employer? 50 or more employees
(located anywhere) Employed on each of 20 or
more workweeks in current or preceding calendar year
20 workweeks need not be consecutive weeks
Count part-time and temporary employees
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
FMLA/CFRA Overview
Who is an eligible employee? Employed by employer for at
least 12 months (consecutive or not)
Worked at least 1250 hours during 12-month period preceding the first day of leave
Worked at a worksite where 50 or more employees are employed by the employer within 75 miles
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
Leave Issues
Did the employer/employee follow proper notice procedures?
Did the employee provide proper medical certification in a timely manner?
Did the employer properly reinstate the employee?
Did the employer properly terminate the employee?
Did the company follow its internal leave policies?
Did the employer consider reasonable accommodations under the ADA/FEHA?
Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com
Other Issues
Workplace Safety – OSHA Immigration Workers’ Compensation Unemployment/Disability Sexual harassment Discrimination Privacy Defamation