Understanding Employer Obligations In The Event Of An Emergency School Closure

On December 15, 2015 the Los Angeles Unified School District made the unprecedented decision to close its 900 schools, impacting 640,000 students and their parents.  It is likely that many of those parents suddenly had to call off work, perhaps leaving some employers in the lurch.  Does an employer have any recourse?  Can it discipline or count the absence against the employee in any way?  The answer with respect to the December 15 incident is a possible “yes,” but all that is about to change January 1.

Unfortunately, with the phrases “terror threat,” “active shooter,” “shelter in place,” and “lockdown” (concepts once virtually unheard of, much less expected by Americans) now becoming part of the daily news cycle, employers should expect more regular school closures as officials err on the side of safety when assessing threats.  As such it is important that California employers with 25 or more employees understand that they must allow employees time off to address school emergencies pursuant to SB579 which takes effect on the first of the year.  The amendments to the Family-School Partnership Act and to Kin Care Leave expand the reasons for which an employee may take job-protected leave under the Family School Partnership Act (Labor Code section 230.8).  Section 230.8 previously required employers with 25 or more employees to allow employees to use up to 40 hours of unpaid time (limited to eight hours in any calendar month) to participate in school or childcare related activities.  The new law expands this provision to also allow employees to take job-protected time off to find, enroll or reenroll their children in a school or with a licensed child care provider.

More significantly in light of recent events, it also allows employees time off to address a “child care provider or school emergency.”  New subsection (e) would define this to mean a child cannot remain in a school or with a child care provider due to one of the following: (1) the school or child care provider has requested the child be picked up, or it has an attendance policy (excluding planned holidays) that prohibits the child from attending or requires the child be picked up; (2) behavioral or discipline problems; (3) closure or unexpected unavailability of the school or child care provider, excluding planned holidays; or (4) a natural disaster, including but not limited to, fire, earthquake or flood.

While section 230.8 previously provided such job-protected leave to parents, guardians and grandparents, the revised law re-defines “parent” to extend these protections to stepparents, foster parents or an employee who stands in loco parentis to a child.

This law also amends California’s “kin care” provision (Labor Code section 233), which requires employers to allow employees to use one-half of their accrued sick leave to care for a “family member” (as defined), to permit an employee to use sick leave for the purposes specified in the Paid Sick Leave law (Labor Code section 245 et seq.).  In other words, rather than attempting to copy over a number of the Paid Sick Leave law’s provisions and definitions into the kin care law, this simpler approach modifies the kin care law to specify that its definition of “family member” and grounds for sick leave is consistent with the Paid Sick Leave law.  This means that employees will be able to use kin-care leave for the illness or preventative care for a child, parent, spouse, registered domestic partner, grandparent, grandchild or sibling.

WTK’s Year-End Checklist

It is that time of year when employers are reviewing new laws and ensuring that their policies and procedures are up to date and compliant.  To that end, we would like to provide a non-exhaustive checklist of items employers should consider as this year draws to a close, and as 2016 begins.

• January 1, 2016—Statewide Minimum Wage Increase to $10.00 per Hour
  • Remember to audit both non-exempt and exempt employees’ hourly rates, salaries, and shift differential practices to ensure they remain compliant.
  • California law requires that in order to be classified as exempt under the administrative, professional or executive exemptions, employees must earn a monthly salary that is twice the state minimum for a full-time employee (40 hours per week).  Consequently, the minimum salary for a full-time, exempt employee will increase to $41,600 per year.
  • The minimum wage law will also change with regard to commissioned inside sales employees, as inside salespersons are only exempt from overtime pay if they earn more than 1.5 times the minimum wage and more than half of their income comes from commissions.  Accordingly, in order to be exempt from overtime pay as of January 1, 2016, all inside salespersons must earn at least $15.01 per hour in order to qualify under this exemption.
• Make Sure Paid Sick Leave Policies Comply With New Laws
  • Review recent clarifications regarding covered employees and alternative accrual and payment methods, discussed in detail here:  WTK's Special Alert re Paid Sick Leave Amendment.
• Review Independent Contractor Agreements
  • The Department of Labor recently opined, “Most workers are employees under the [Fair Labor Standards Act].” 
  • In light of Administrator's Interpretation No. 2015-1:  (1) do a cost/benefit analysis of using contingent workers, (2) conduct due diligence on staffing agencies and vendors, and most importantly (3) review independent contractor relationships and agreements to ensure true independent contractor relationships exist.
• Become Familiar With Updated California Family Rights Act Updates  and Family Medical Leave Act Investigations
  • Review updated CFRA definitions, requirements and forms.  A detailed discussion of the CFRA regulatory amendments can be found here:  WTK's Special Alert re California Family Rights Act Regulatory Changes.
  • Review FMLA records as the Department of Labor continues to ramp up its investigation of systemic FMLA issues, including taking aim at three types of information kept by employers:  (1) statistical, including leave trends, leave requests, leave approvals and responses to leave requests; (2) anecdotal, including interviews with employees, supervisors and administrators; and (3) documents, including records of leave requests, notices provided and leave determinations.
• Audit Pay Differentials Between Men and Women
  • Labor Code section 1197.5 now provides for a broader prohibition of gender-based wage differentials, requires employers to demonstrate exemptions, includes anti-retaliation protections, and lengthens preservation time for required recordkeeping.

And make sure to check out our detailed report of all recent legislative changes here:  WTK's California Legislative Report.

AGENCY UPDATES

Occupational Safety and Health Administration Penalties Set to Increase in 2016

For the first time since 1990, the Occupational Safety and Health Administration (OSHA) has been authorized to increase its civil penalties under a provision inserted into the Bipartisan Budget Act of 2015, which was signed by President Obama in November 2015.  The increases, which are expected to be significant, will be calculated on the Consumer Price Index between 1990 and 2015.  While the law provides that the maximum adjustment must be capped at 150 percent, most reports indicate that because the catch-up adjustment cannot exceed the rate of inflation from 1990 through 2015, the increase will most likely be approximately 80 percent.  “Other Than Serious” and “Serious” citations are expected to increase from a current maximum fine of $7,000 to $12,500 each.  “Willful” and “Repeat” citations, which have a current maximum fine of $70,000, are expected to increase to approximately $125,000 each.

The adjustment will take effect by August 2016, with annual inflation increases going forward.

JUDICIAL DEVELOPMENTS

California Appellate Court Holds the Federal Arbitration Act’s Exemptions Must Be Narrowly Construed and Determines Independent Contractor Agreement Is Not Subject to an Exemption

Performance Team Freight Systems, Inc. v. Aleman (2015) 241 Cal.App.4th 1233

A group of truck drivers filed wage claims with the Division of Labor Standards Enforcement (DLSE) for unreimbursed business expenses and improper deductions.  Prior to the DLSE holding a hearing on their claims, the employer filed a petition to compel arbitration in superior court, arguing each truck driver had entered into an “Independent Contractor Agreement” containing an arbitration provision.  The trial court denied arbitration, finding the truck drivers were exempt from the Federal Arbitration Act (FAA) under the “transportation workers” exemption.

The FAA mandates arbitration when contracts involving interstate commerce contain arbitration provisions.  Section 1 of the FAA, however, exempts from coverage “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” 

Interpreting the FAA’s exemption narrowly, the appellate court held the FAA’s transportation workers’ exemption did not apply because the truck drivers had not entered a “contract of employment.”  Citing numerous federal cases, the appellate court held that agreements are not deemed “contracts of employment” unless the party opposing arbitration proves they are such.  Since the truck drivers had not provided any evidence contradicting the independent contractor agreement, which provided terms consistent with independent contractor relationships generally (e.g., the drivers could choose the days and hours of operations, they could refuse to accept assignments), the appellate court held the agreements were not “contracts of employment” under Section 1 of the FAA.     

The Continuing Violation Doctrine Does Not Apply Where the Employee’s Testimony Establishes that Further Efforts to End Discrimination, Harassment, or Retaliation Would be in Vain

Jumaane v. City of Los Angeles (2015) 2015 Cal.App.LEXIS 1000

A jury in Los Angeles County awarded an employee more than one million dollars in damages on various racial discrimination, harassment, and retaliation claims.  The employer moved for judgment notwithstanding the verdict, which the trial court denied.  The employer appealed the judgment. 

The court of appeal reversed the lower court judgment and remanded the case, holding a plaintiff suing for violations of the Fair Employment and Housing Act (FEHA) cannot recover for conduct occurring more than one year before the filing of the Department of Fair Employment and Housing (DFEH) complaint, unless the continuing violation doctrine applies. 

Under this doctrine, the statute of limitations begins to run either when the course of conduct ends (by the employer’s cessation or employee’s resignation), or when the employee is on notice that further efforts to end the unlawful conduct would be in vain.  

The court reasoned the doctrine did not apply in this case because a majority of the employer’s conduct, which occurred more than a year before the employee filed his DFEH complaint, was permanent.  The employee’s own testimony regarding prior complaints he made about race-related concerns, including multiple internal complaints and grievances, established the employee was aware of the employer’s conduct and on notice that further efforts to end the conduct would be in vain.  Therefore, the one-year statute of limitations applied. The court further reasoned the evidence of conduct occurring within the one-year limitations period was insufficient to support the employee’s claims.  For example, evidence of racial discrimination was insufficient to prove a disparate impact claim.  Further, actions necessary to carry out the duties of business, such as disciplinary suspensions, did not constitute harassment under the FEHA.

Ninth Circuit Holds That Equal Employment Opportunity Commission Can Subpoena Extensive Employee Information, Even if Such Information is Only Tangentially Related to the Underlying Charge

EEOC v. McLane Company, Inc. (9th Cir. Oct. 27, 2015) 2015 U.S. App.LEXIS 187702

A former employee filed a charge with the Equal Employment Opportunity Commission (EEOC) alleging sex discrimination (based on pregnancy) in violation of Title VII.  She alleged she was not allowed to return from maternity leave unless she passed a physical capability strength test, which she failed three times, resulting in her termination.  Company policy required all new employees and employees returning from extensive leaves to take the test for positions classified as physically demanding.

The EEOC requested certain information from the employer, including information on the strength test and employees who had been required to take the test.  The employer complied with much of the request, but refused to produce “pedigree information” for each test taker, i.e., name, social security number, address, and phone number, arguing that such information was irrelevant.  The EEOC also sought, and the employer refused to provide, reasons for the termination of any test takers.  The employer argued that such information was unduly burdensome to produce.  The EEOC filed a subpoena enforcement action.  The district court denied the EEOC’s request for this information and the EEOC appealed.

The ninth circuit held employee pedigree information was relevant, reasoning the EEOC is entitled to “virtually any material that might cast light on the allegations against the employer,” and the EEOC may use the pedigree information to interview other employee test takers regarding the employee’s allegations.  The EEOC need not show that the information was necessary for the investigation into whether the strength test discriminates on the basis of sex.  As for information regarding the reasons for termination of other employee test takers, the ninth circuit noted the employer did not have to produce the information if it would be unduly burdensome, and remanded to the district court for further consideration.