BRINKER DECISION UPDATE: The California Supreme Court has released its long-awaited decision in the Brinker case. Be sure to join us for our exclusive webinar on May 23rd to get all the details on what you need to know—and do—in response to this new guidance.
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Flexible Workplace Arrangements (FWAs) are more and more attractive and much easier to manage with today’s technologies, says attorney David Fortney, but the laws that govern them were passed long before the technologies existed, and that can make management difficult.
Fortney is a co-founder of law firm Fortney & Scott, LLC, in Washington, DC, and is editor of the Federal Employment Law Insider. He made his remarks about FWAs at SHRM’s Employment Law and Legislative Conference, held recently in the nation’s capitol.
What Are Flexible Workplace Arrangements?
First, says Fortney, here are the typical alternatives to traditional schedules and workplaces that constitute “flexible work arrangements” (FWAs):
Why Are FWAs Important?
FWAs are particularly attractive because they serve three kinds of interests, says Fortney:
Employees’ interests:
Employers’ interests:
Societal interests:
What’s Driving the Flex Trend?
What’s driving the trend toward more flexible work environments? Workforce demographics are different in the 21st century, says Fortney. Consider the following:
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Laws Are FWA’s Biggest Chokehold
Unfortunately, our laws were not designed with FWAs in mind, says Fortney. They were designed for people who worked regularly scheduled hours at a particular place of work. The main laws that impact FWAs are:
Fair Labor Standards Act. The federal Fair Labor Standards Act’s rules can interfere with some attempts to arrange flex hours. For example:
One client, Fortney says, requires employees to turn in their PDAs when leaving work to be sure that no one uses them to do any work after hours.
National Labor Relations Act. The law may impose a duty to bargain over FWAs.
Occupational Safety and Health Act. OSHA wanted to control home offices, Fortney says, but they had to back off of that. Nevertheless, you have workers working in places you can’t supervise. Some employers do distribute specific rules for home offices, Fortney notes.
Family and Medical Leave Act. The FMLA may come into play, and the Americans with Disabilities Act/ADAAA could bring up questions about the flex accommodations required.
State and local laws. Finally, state and local laws must be considered. For example, California’s daily overtime requirement creates difficulties for some flex programs.
Fixes to these mismatches between old laws and new workplace realities are not likely in the short term, says Fortney.
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A Sampling of Research and Reports
One helpful thing is that there are lots of good resources out there, Fortney says. He recommends two reports in particular:
Alfred P. Sloan Foundation’s National Initiative on Workplace Flexibility. This lengthy report from the National Advisory Commission on Workplace Flexibility was issued in May 2009. It identifies obstacles to FWAs and provides recommendations for removing those obstacles. You’ll have to tailor its information to your organization, Fortney says.
President’s Council of Economic Advisors Report on “Work-Life Balance and the Economics of Workplace Flexibility.” Issued in March 2010, this is a thoughtful report on middle class issues, says Fortney, and a good resource if you need ammo to support your FWA initiatives. The report:
In tomorrow’s CED, more on FWAs—plus an introduction to the only employment law conference California employers need to attend this year.
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In yesterday’s CED, California attorney (and SPHR) Allison West offered tips for avoiding defamation, negligence, and fraud lawsuits. Today, her tips on recruiting, plus an introduction to a comprehensive desk reference on discrimination and harassment—specifically for California employers.
West, principal of Employment Practices Specialists in Pacifica, gave her advice at SHRM’s Employment Law and Legislative Conference, held recently in Washington, DC.
Here are West’s tips for avoiding hiring lawsuits:
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Discrimination, Harassment, and Retaliation: A Complete Manual for California Employers
Discrimination, harassment, and retaliation are words employers don’t like to hear, to say the least.
These three simple words describe a range of unlawful conduct that weaves a web of potential liability for employers of all sizes. These types of lawsuits can be costly, as the retailer Abercrombie & Fitch learned when it agreed to settle a class action discrimination lawsuit for approximately $50 million.
Although you’re probably familiar with basic discriminatory, harassing, and retaliatory conduct, applying the various applicable federal and state laws to real-life scenarios can be tricky. How you deal with these situations can lead to employee complaints, lawsuits, and expensive resolutions.
Preventing discrimination, harassment, and retaliation in the workplace starts here, with our brand-new manual exclusively for California employers.
The report includes sections on:
The report also contains 9 easy-reference charts for quick access to the information you need, when you need it.
Don’t miss out! Order your copy of Discrimination, Harassment, and Retaliation: A Complete Manual for California Employers today. Your satisfaction is 100 percent guaranteed.
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Most employers are all too aware of the danger of discrimination lawsuits, but there are many other legal threats in the HR arena. In today’s CED, California attorney and SPHR Allison West briefs employers on defamation, negligence, and fraud lawsuits.
West, principal of Employment Practices Specialists in Pacifica, offered her tips at SHRM’s Employment Law and Legislative Conference, held recently in Washington, DC.
Defining Defamation
In the HR world, defamation often rears itself in relation to references. What exactly is defamation? West notes that, first of all, it has to be a “false statement of fact.” So opinions aren’t defamation because they aren’t fact.
Some states offer a qualified privilege for those giving references (see below), so a statement also is not defamatory if it falls under the privilege.
The statement must be made about an employee, and it must be disclosed to a third person.
Finally, the statement must cause damage to the individual’s reputation, or expose the individual to public ridicule, shame, hatred, or contempt.
Truth Is a Defense
Remember, says West, that “Truth is a defense in defamation cases.”
Proactive Best Practices for References
To avoid legal entanglements, employers should be proactive in dealing with references. West says that employers should start by ensuring that they maintain accurate and objective personnel files.
Then, obtain an authorization and a release from the employee before seeking a reference.
Also be sure to train supervisors and managers about your policies regarding the circumstances in which information may be released and which information may be released.
Make sure that managers and supervisors know to avoid actions that might be viewed as blacklisting (“You’ll never work in this town again”). Blacklisting is a criminal offense in some states—including California, notes West.
Finally, use caution when writing reference letters as part of a settlement, West says. It may be tempting to omit negative information, says West, but remember there is always the possibility of being sued for negligence for not revealing important information—for example, relating to violence.
Can We Talk ‘Off the Record’?
Inform your managers that there’s no such thing as “off the record” when it comes to references, says West.
Negligent Hiring
Employers have a duty to exercise reasonable care in hiring, West says. Negligent hiring suits may arise if employers hire someone with known dangerous traits, or if a reasonable inquiry would have discovered that the individual posed a threat to others.
What If I Hire Through Agencies?
Are you safe if you hire through agencies? Don’t they do a background check? Agencies make money by placing people, West says. When she asks employers, they usually say, “I think the agency does something.” That’s not good enough; find out what they do in the way of reference checks.
Fraudulent Promises
When employers make promises and then renege, it could bring a charge of fraud, West says. The standard would be that the employer intentionally deceived the employee concerning a material fact and that the employee reasonably relied on the false representation and was damaged.
West’s basic rule is simple: Be truthful. When you are “selling” a prospective employee, be sure to avoid overselling, West says. Avoid statements that might be considered as promises about job security, the stability of the company, careers, or compensation like these:
In tomorrow’s CED, West’s tips for avoiding hiring-related lawsuits, plus an introduction to a comprehensive desk reference on discrimination and harassment – specifically for California employers.
Calculation of overtime in California differs from other states in regard to what hours count toward the total hours worked in the week, and that’s just the beginning. Even the best HR professionals can find the topic of paying overtime in California perplexing.
Questions arise about what exactly constitutes the regular rate of pay, which is necessary for determining how much overtime compensation is owed. You must take into account commissions, bonuses, and other payments. Particularly vexing is how to compute the overtime pay on a bonus that rewards employees for a quarter, a year, or another set period of time. And what happens to the regular pay rate calculation when an employee works in two job classifications that are paid different hourly rates? How can you ensure that you’re accurately paying overtime at a blended rate?
In a CER webinar titled "Overtime Pay in California: HR’s Pay Practice How-To," Allen Kato outlined answers to these very questions. In this article, we’ll discuss some tips on how to calculate the regular rate of pay, which is the basis for calculating your overtime in California.
To calculate overtime pay, we need to calculate the "regular rate" of pay for each workweek. Normally, we do this by adding up all compensation for week and divide by 40 (hours) in the week. Calculating overtime in California, however, does not allow the federal "fluctuating workweek" method of calculating the regular rate, i.e., dividing the compensation for week by number of hours actually worked. This is a trap for the inexperienced – this is not how it should be calculated in California.
By including all compensation, this allows us to incorporate compensation above and beyond the standard hourly rate when determining how much the overtime rate should be. As such, include all compensation in calculating regular rate, such as (list not exhaustive):
However, you may exclude some items from the regular rate computation:
Basically, things that can be excluded must not be determined by or based on the number of hours worked, production or efficiency. (Be careful not to call something discretionary if it truly is calculated based on productivity!)
Additionally, Kato advised, "you can exclude from the regular rate calculation, holiday or sick pay, or other compensation . . . that are not compensation for hours worked," such as reporting time and call back pay, and premium pay for missed meal periods, rest breaks or overtime pay itself (so that you don’t pay overtime twice).
You also don’t have to include the value or income from stock option awards to non-exempt employees or for the employees’ participation in employee stock purchase programs . This exclusion must meet certain requirements and is more complex than the other calculations – seek appropriate counsel on these types of calculations!
These are just some basics on how to determine the regular rate of pay as the basis for overtime pay calculation, but this is just the tip of the iceberg. Calculating the correct overtime in California can be complex. Are you prepared?
To register for a future webinar, visit CER webinars.
Allen Kato is an attorney in the Employment Practices Group of Fenwick & West LLP in San Francisco. His practice concentrates exclusively on representing management in equal employment opportunity, wage and hour, wrongful termination, privacy, unfair competition, and trade secret matters, and litigating individual and class action lawsuits before courts and agencies.
Wage/hour violations, like lunch break payments, can seem like small potatoes. But multiply them by 250 workdays a year and 1,000 employees, and add penalties—and you’ve suddenly got a big-ticket fine.
Common Violation #1: Meal Breaks
Bona fide meal periods (typically 30 minutes or more) are not work time, and an employer does not have to pay for them. However, the employees must be completely relieved from duty.
If employees are expected to do work during lunch (for example, answer phones or sit at the reception desk), they are not considered "relieved from duty" under California law.
Common Violation #2: Other Breaks
In California, employees are entitled to 10 minutes of rest for shifts from 3.5 to 6 hours in length, and to another 10 minutes rest for shifts from 6 hours to 10 hours in length. Rest periods need not be timed to fall specifically before or after any meal period.
Common Violation #3: On-Call Time
An employee who is required to remain on call on the employer's premises, or so close to the premises that the employee cannot use the time effectively for his or her own purposes, is considered to be working while on-call.
An employee who is required to carry a cell phone or a beeper, or who is allowed to leave a number where he or she can be reached, may or may not be considered to be working while on-call. The greater the constraints on the employee's freedom, the more likely it is that the time must be compensated.
Common Violation #4: Unauthorized Hours Worked
Employees must be paid for work "suffered or permitted" by the employer, even if the employer does not specifically authorize the work. If the employer knows or has reason to believe that the employee is continuing to work, the time is considered hours worked.
Don’t Miss Our Brinker Webinar Next Week!
As you’ve certainly heard by now, employers in California appear to have dodged a food fight of gargantuan proportions.
The California Supreme Court’s conclusion in Brinker that employers must merely "provide" the required meal and rest periods, and aren't obligated under the law to ensure that workers actually take them, means you’re not put in the unwelcome role of Meal Period Police.
However, while the Brinker decision may seem like a coup, California employers should not, by any means, grow complacent of their wage and hour obligations. California has some of the toughest wage and hour laws in the country.
More than 10 years ago, California became one of a handful of states to impose monetary penalties on employers that violate the state's labor code as it applies to meal and rest breaks. Employers can be on the hook for one hour of pay for each missed half-hour meal period.
This gives California employees greater protections than under federal law because the Fair Labor Standards Act doesn't mandate that employers must provide these types of breaks.
Get up to speed on everything you need to know in the new post-Brinker world. Join us on Wednesday, May 23, for an in-depth webinar all about the practical implications of the Brinker decision.
You’ll learn:
Don’t miss it—register now and reserve your spot!
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The employment laws in California are some of the strictest in the nation.
It's no secret that we live in the most litigious society in history. And that companies like yours are a favorite target for the media, attorneys, courts, disgruntled employees, and even job candidates.
California workers are particularly prone to complain about the company that employs them.
California Employer Advisor, our award-winning HR advisory newsletter, will introduce you to all aspects of the continually changing state and federal laws governing your relationship with your employees.
Not only do we report on the important laws, management practices, and cases that impact your business, we also outline pragmatic, actionable ideas to help ensure full compliance, avoid lawsuits, and protect your company from financial losses