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HIGGS, FLETCHER & MACK HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM LLP WWW.HIGGSLAW.COM EMPLOYMENT/ EMPLOYMENT/ IMMIGRATION SEMINAR IMMIGRATION SEMINAR James M. Peterson, Esq. James M. Peterson, Esq. Sam G. Sherman, Esq. Sam G. Sherman, Esq. Higgs, Fletcher & Mack LLP Higgs, Fletcher & Mack LLP 401 West A Street, Suite 2600 401 West A Street, Suite 2600 San Diego, CA 92101 San Diego, CA 92101 619.236.1551 619.236.1551 www.higgslaw.com Blog: Blog: www.sdemploymentlaw.wordpress.com

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EMPLOYMENT/ IMMIGRATION SEMINAR. James M. Peterson, Esq. Sam G. Sherman, Esq. Higgs, Fletcher & Mack LLP 401 West A Street, Suite 2600 San Diego, CA 92101 619.236.1551 www.higgslaw.com Blog: www.sdemploymentlaw.wordpress.com. EXEMPT EMPLOYEES. EXEMPT FROM ALL PROVISIONS - PowerPoint PPT Presentation

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Page 1: EMPLOYMENT/ IMMIGRATION SEMINAR

HIGGS, FLETCHER & MACK LLP HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COMWWW.HIGGSLAW.COM

EMPLOYMENT/EMPLOYMENT/IMMIGRATION SEMINARIMMIGRATION SEMINARJames M. Peterson, Esq.James M. Peterson, Esq.

Sam G. Sherman, Esq. Sam G. Sherman, Esq. Higgs, Fletcher & Mack LLPHiggs, Fletcher & Mack LLP401 West A Street, Suite 2600401 West A Street, Suite 2600San Diego, CA 92101San Diego, CA 92101619.236.1551619.236.1551www.higgslaw.com

Blog: Blog: www.sdemploymentlaw.wordpress.com

Page 2: EMPLOYMENT/ IMMIGRATION SEMINAR

HIGGS, FLETCHER & MACK LLP HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COMWWW.HIGGSLAW.COM

EXEMPT EMPLOYEESEXEMPT EMPLOYEES

EXEMPT FROM ALL PROVISIONSEXEMPT FROM ALL PROVISIONS OUTSIDE SALESPERSONSOUTSIDE SALESPERSONS GOVERNMENT EMPLOYEESGOVERNMENT EMPLOYEES MEMBERS OF IMMEDIATE FAMILYMEMBERS OF IMMEDIATE FAMILY

MINIMUM WAGE, OVERTIME, REST AND MINIMUM WAGE, OVERTIME, REST AND MEAL PERIODSMEAL PERIODS ADMINISTRATIVE, EXECUTIVE AND ADMINISTRATIVE, EXECUTIVE AND

PROFESSIONALSPROFESSIONALS

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HIGGS, FLETCHER & MACK LLP HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COMWWW.HIGGSLAW.COM

EXECUTIVE EXEMPTIONEXECUTIVE EXEMPTION

Executive ExemptionExecutive Exemption. A person employed in an executive . A person employed in an executive capacity means any employee:capacity means any employee:

(a) Whose duties and responsibilities involve the management of (a) Whose duties and responsibilities involve the management of the enterprise in which he/she is employed or of a customarilythe enterprise in which he/she is employed or of a customarilyrecognized department or subdivision thereof; recognized department or subdivision thereof; andand

(b) Who customarily and regularly directs the work of two or (b) Who customarily and regularly directs the work of two or more other employees therein; more other employees therein; andand

(c) Who has the authority to hire or fire other employees or (c) Who has the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring or whose suggestions and recommendations as to the hiring or firing and as to the advancement and promotion or any other firing and as to the advancement and promotion or any other change of status of other employees will be given particular change of status of other employees will be given particular weight; andweight; and

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EXECUTIVE EXEMPTION EXECUTIVE EXEMPTION (CONTINUED)(CONTINUED)

(d) Who customarily and regularly exercises (d) Who customarily and regularly exercises discretion and independent judgment; discretion and independent judgment; andand

(e) Who is primarily engaged in duties which (e) Who is primarily engaged in duties which meet the test of the exemption. meet the test of the exemption.

(f) Such an employee must also earn a monthly (f) Such an employee must also earn a monthly salary equivalent to no less than two (2) times salary equivalent to no less than two (2) times the state minimum wage for full-time the state minimum wage for full-time employment. Full-time employment is defined in employment. Full-time employment is defined in Labor Code Section 515(c) as 40 hours per week.Labor Code Section 515(c) as 40 hours per week.

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HIGGS, FLETCHER & MACK LLP HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COMWWW.HIGGSLAW.COM

Administrative ExemptionAdministrative Exemption

Administrative ExemptionAdministrative Exemption. A person employed in an . A person employed in an administrative capacity means any employee:administrative capacity means any employee:

(a) Whose duties and responsibilities involve either:(a) Whose duties and responsibilities involve either:

(i) The performance of office or non-manual work directly (i) The performance of office or non-manual work directly related to management policies or general business operations of related to management policies or general business operations of his/her employer or his/her employer’s customers; orhis/her employer or his/her employer’s customers; or

(ii) The performance of functions in the administration of a (ii) The performance of functions in the administration of a school system, or educational establishment or institution, or of a school system, or educational establishment or institution, or of a department or subdivision thereof, in work directly related to the department or subdivision thereof, in work directly related to the academic instruction or training carried on therein; academic instruction or training carried on therein; andand

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ADMINISTRATIVE EXEMPTION ADMINISTRATIVE EXEMPTION (CONTINUED)(CONTINUED)

(b) Who regularly and directly assists a (b) Who regularly and directly assists a proprietor, or an employee employed in a bona proprietor, or an employee employed in a bona fide executive or administrative capacity; orfide executive or administrative capacity; or

(c) Who performs under only general supervision, (c) Who performs under only general supervision, work along specialized or technical lines requiring work along specialized or technical lines requiring special training, experience, or knowledge; orspecial training, experience, or knowledge; or

(d) Who executes under only general supervision (d) Who executes under only general supervision special assignments and tasksspecial assignments and tasks

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Professional ExemptionProfessional Exemption

Professional ExemptionProfessional Exemption. A person employed in a . A person employed in a professional capacity means any employee who meets all professional capacity means any employee who meets all of the following requirements:of the following requirements:

(a) Who is licensed or certified by the State of California (a) Who is licensed or certified by the State of California and is primarily engaged in the practice of one of the and is primarily engaged in the practice of one of the following recognized professions: law, medicine, dentistry, following recognized professions: law, medicine, dentistry, optometry, architecture, engineering, teaching, or optometry, architecture, engineering, teaching, or accounting; oraccounting; or

(b) Who is primarily engaged in an occupation commonly (b) Who is primarily engaged in an occupation commonly recognized as a learned or artistic profession. recognized as a learned or artistic profession.

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Professional Exemption Professional Exemption (CONTINUED)(CONTINUED)

For the purposes of this subsection, “learned or artistic profession” means an For the purposes of this subsection, “learned or artistic profession” means an employee who is primarily engaged in the performance of:employee who is primarily engaged in the performance of:

(i) Work requiring knowledge of an advanced type in a field or science or (i) Work requiring knowledge of an advanced type in a field or science or learning customarily acquired by a prolonged course of specialized intellectual learning customarily acquired by a prolonged course of specialized intellectual instruction and study, as distinguished from a general academic education and from instruction and study, as distinguished from a general academic education and from an apprenticeship, and from training in the performance of routine mental, manual, an apprenticeship, and from training in the performance of routine mental, manual, or physical processes, or work that is an essential part of or necessarily incident to or physical processes, or work that is an essential part of or necessarily incident to any of the above work; orany of the above work; or

(ii) Work that is original and creative in character in a recognized field of (ii) Work that is original and creative in character in a recognized field of artistic endeavor (as opposed to work which can be produced by a person endowed artistic endeavor (as opposed to work which can be produced by a person endowed with general manual or intellectual ability and training), and the result of which with general manual or intellectual ability and training), and the result of which depends primarily on the invention, imagination, or talent of the employee or work depends primarily on the invention, imagination, or talent of the employee or work that is an essential part of or necessarily incident to any of the above work; and that is an essential part of or necessarily incident to any of the above work; and

(iii) Whose work is predominantly intellectual and varied in character (as (iii) Whose work is predominantly intellectual and varied in character (as opposed to routine mental, manual, mechanical ,or physical work) and is of such opposed to routine mental, manual, mechanical ,or physical work) and is of such character that the output produced or the result accomplished cannot be character that the output produced or the result accomplished cannot be standardized in relation to a given period of time.standardized in relation to a given period of time.

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HIGGS, FLETCHER & MACK LLP HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COMWWW.HIGGSLAW.COM

EXEMPT STATUSEXEMPT STATUS

““PRIMARILY ENGAGED IN” THE DUTIES PRIMARILY ENGAGED IN” THE DUTIES WHICH MEET THE TEST OF THE WHICH MEET THE TEST OF THE EXEMPTIONEXEMPTION

MORE THAN HALF OF THEIR TIME IN EXEMPT MORE THAN HALF OF THEIR TIME IN EXEMPT WORK—”QUANTITATIVE TEST”WORK—”QUANTITATIVE TEST”

CONTRAST WITH FLSA—”PRIMARY CONTRAST WITH FLSA—”PRIMARY DUTY”—”QUALITATIVE TEST”DUTY”—”QUALITATIVE TEST”

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HIGGS, FLETCHER & MACK LLP HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COMWWW.HIGGSLAW.COM

EXEMPT STATUSEXEMPT STATUS

ACTIVITIES TO BE CONSIDERED EXEMPT INCLUDE WORK ACTIVITIES TO BE CONSIDERED EXEMPT INCLUDE WORK “DIRECTLY AND CLOSELY RELATED” TO EXEMPT WORK AND “DIRECTLY AND CLOSELY RELATED” TO EXEMPT WORK AND WORK PROPERLY VIEWED AS A MEANS FOR CARRYING OUT WORK PROPERLY VIEWED AS A MEANS FOR CARRYING OUT EXEMPT FUNCTIONSEXEMPT FUNCTIONS

GUIDANCE IN 29 C.F.R. 541.108(MANAGERIAL); GUIDANCE IN 29 C.F.R. 541.108(MANAGERIAL); 208(ADMINISTRATIVE); 308(PROFESSIONAL)208(ADMINISTRATIVE); 308(PROFESSIONAL)

EXAMPLES: EXAMPLES: TIMEKEEPER VS. PAYROLL CLERKTIMEKEEPER VS. PAYROLL CLERK SALES RECORDS FOR SUPERVISION VS. PRODUCTION RECORDS SALES RECORDS FOR SUPERVISION VS. PRODUCTION RECORDS

FOR THOSE NOT UNDER CONTROL OR SUPERVISIONFOR THOSE NOT UNDER CONTROL OR SUPERVISION DISTRIBUTION OF MATERIALS OR MERCHANDISE AND SUPPLIES VS. DISTRIBUTION OF MATERIALS OR MERCHANDISE AND SUPPLIES VS.

RETAIL ESTABLISHMENT WHERE TASKS PERFORMED BY NON-RETAIL ESTABLISHMENT WHERE TASKS PERFORMED BY NON-EXEMPT WORKERSEXEMPT WORKERS

SETUP WORKSETUP WORK

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EXEMPT STATUSEXEMPT STATUS

OCCASSIONAL TASKSOCCASSIONAL TASKS IWC DOES NOT INTEND TASKS TO BE IWC DOES NOT INTEND TASKS TO BE

INCLUDED IN THE CALCULATION OF INCLUDED IN THE CALCULATION OF EXEMPT WORKEXEMPT WORK

NON-EXEMPT WORK PERFORMED BY AN NON-EXEMPT WORK PERFORMED BY AN EXEMPT MANAGER ON AN OCCASSIONAL EXEMPT MANAGER ON AN OCCASSIONAL BASIS MAY NOT BE COUNTED TOWARD THE BASIS MAY NOT BE COUNTED TOWARD THE 50% REQUIREMENT50% REQUIREMENT

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HIGGS, FLETCHER & MACK LLP HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COMWWW.HIGGSLAW.COM

EXEMPT STATUSEXEMPT STATUS

EXERCISE OF DISCRETION AND EXERCISE OF DISCRETION AND INDEPENDENT JUDGMENTINDEPENDENT JUDGMENT

COMPARISON AND EVALUATION OF POSSIBLE COMPARISON AND EVALUATION OF POSSIBLE COURSES OF CONDUCT AND ACTING OR COURSES OF CONDUCT AND ACTING OR MAKING A DECISION AFTER THE VARIOUS MAKING A DECISION AFTER THE VARIOUS POSSIBILITIES HAVE BEEN CONSIDERED 29 POSSIBILITIES HAVE BEEN CONSIDERED 29 C.F.R. C.F.R. § 541.207§ 541.207

AUTHORITY OR POWER TO MAKE AN INDEPENDENT AUTHORITY OR POWER TO MAKE AN INDEPENDENT CHOICE, FREEE FROM IMMEDIATE DIRECTION OR CHOICE, FREEE FROM IMMEDIATE DIRECTION OR SUPERVISION AND WITH RESPECT TO MATTERS OF SUPERVISION AND WITH RESPECT TO MATTERS OF SIGNIFICANCESIGNIFICANCE

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HIGGS, FLETCHER & MACK LLP HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COMWWW.HIGGSLAW.COM

EXEMPT STATUSEXEMPT STATUS

REALISTIC EXPECTATIONSREALISTIC EXPECTATIONS

WORK ACTUALLY PERFORMED MUST BE WORK ACTUALLY PERFORMED MUST BE EXAMINED AND THE AMOUNT OF TIME EXAMINED AND THE AMOUNT OF TIME SPENT ON EXEMPT WORK TOGETHER SPENT ON EXEMPT WORK TOGETHER WITH THE EMPLOYER’S REALISTIC WITH THE EMPLOYER’S REALISTIC EXPECTATIONS AND THE REALISTIC EXPECTATIONS AND THE REALISTIC REQUIREMENTS OF THE JOB MUST BE REQUIREMENTS OF THE JOB MUST BE CONSIDEREDCONSIDERED

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HIGGS, FLETCHER & MACK LLP HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COMWWW.HIGGSLAW.COM

EXEMPT STATUSEXEMPT STATUS

SALARY REQUIREMENTSSALARY REQUIREMENTS

SALARY EQUILAVENT TO TWO TIMES SALARY EQUILAVENT TO TWO TIMES THE STATE MINIMUM WAGE ($7.50) OR THE STATE MINIMUM WAGE ($7.50) OR $2600 PER MONTH.$2600 PER MONTH.

INCREASES TO $8.00 PER HOUR 1/1/08 INCREASES TO $8.00 PER HOUR 1/1/08 OR ABOUT $2775 PER MONTHOR ABOUT $2775 PER MONTH

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HIGGS, FLETCHER & MACK LLP HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COMWWW.HIGGSLAW.COM

SALES PERSONSSALES PERSONS

OUTSIDE SALESPERSONOUTSIDE SALESPERSON ““Outside salesperson” means any person, 18 Outside salesperson” means any person, 18

years of age or over, who customarily and years of age or over, who customarily and regularly works more than half the working regularly works more than half the working time away from the employer’s place of time away from the employer’s place of business selling tangible or intangible items or business selling tangible or intangible items or obtaining orders or contracts for products, obtaining orders or contracts for products, services or use of facilities.services or use of facilities.

EXEMPT FROM WAGE ORDERSEXEMPT FROM WAGE ORDERS

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SALES PERSONSSALES PERSONS

COMMISIONED SALES PERSONSCOMMISIONED SALES PERSONS EXEMPT FROM OVERTIME EXEMPT FROM OVERTIME

REQUIREMENTSREQUIREMENTS

EARNINGS MUST EXCEED ONE AND EARNINGS MUST EXCEED ONE AND ONE-HALF MINIMUM WAGE, IF MORE ONE-HALF MINIMUM WAGE, IF MORE THAN HALF OF THE EMPLOYEE’S THAN HALF OF THE EMPLOYEE’S COMPENSATION REPRESENTS COMPENSATION REPRESENTS COMMISSIONSCOMMISSIONS

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HIGGS, FLETCHER & MACK LLP HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COMWWW.HIGGSLAW.COM

COMMISSIONSCOMMISSIONS

In order to comply with the requirements In order to comply with the requirements of the exemption for each workweek the of the exemption for each workweek the earnings of the employee, whether earnings of the employee, whether actual commissions or a guaranteed actual commissions or a guaranteed draw for the workweek against draw for the workweek against commissions to be earned within such commissions to be earned within such work week, must exceed 1.5 times the work week, must exceed 1.5 times the minimum wage for each hour worked minimum wage for each hour worked during the pay period.during the pay period.

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COMMISSIONSCOMMISSIONS

THE 50% OF EARNINGS FROM COMMISSIONS RULE, THE 50% OF EARNINGS FROM COMMISSIONS RULE, MUST ALSO BE SATISFIED IN EACH WORKWEEK.MUST ALSO BE SATISFIED IN EACH WORKWEEK.

THE ACTUAL DETERMINATION OF COMPLIANCE CAN THE ACTUAL DETERMINATION OF COMPLIANCE CAN BE DEFERRED UNTIL THE RECONCILIATION DATE BE DEFERRED UNTIL THE RECONCILIATION DATE FOLLOWING THE END OF THE SECOND PAY PERIOD. FOLLOWING THE END OF THE SECOND PAY PERIOD.

OVERTIME WILL BE DUE FOR ANY WEEK IN WHICH OVERTIME WILL BE DUE FOR ANY WEEK IN WHICH THE SECOND COMPONENT IS NOT MET. TO TEST FOR THE SECOND COMPONENT IS NOT MET. TO TEST FOR WHETHER THE COMPENSATION ARRANGEMENT IS A WHETHER THE COMPENSATION ARRANGEMENT IS A BONA FIDE COMMISSION PLAN, CALIFORNIA LAW BONA FIDE COMMISSION PLAN, CALIFORNIA LAW ALSO USES A PERIOD OF AT LEAST ONE MONTH.ALSO USES A PERIOD OF AT LEAST ONE MONTH.

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HIGGS, FLETCHER & MACK LLP HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COMWWW.HIGGSLAW.COM

EXEMPT EMPLOYEESEXEMPT EMPLOYEES

PENALTIES AND REMEDIES FOR PENALTIES AND REMEDIES FOR MISCLASSFICATIONMISCLASSFICATION

ADMINISTRATIVE ENFORCENT BY THE DLSEADMINISTRATIVE ENFORCENT BY THE DLSE LABOR COMMISSIONER OR BERMAN HEARINGSLABOR COMMISSIONER OR BERMAN HEARINGS

JUDICIAL ENFORCEMENTJUDICIAL ENFORCEMENT INTEREST, WAITING TIME PENALTIES, INTEREST, WAITING TIME PENALTIES,

ATTORNEYS FEES, PENALTIESATTORNEYS FEES, PENALTIES

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STATUTE OF LIMITATIONSSTATUTE OF LIMITATIONS

STATUTORY CLAIMSSTATUTORY CLAIMS

3 YEARS—STATUTORY CLAIM FOR WAGES3 YEARS—STATUTORY CLAIM FOR WAGES 1 YEAR-PENALTIES1 YEAR-PENALTIES 4 YEARS-UNFAIR COMPETITION4 YEARS-UNFAIR COMPETITION

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AVOIDING CLAIMSAVOIDING CLAIMS

REVIEW THE POSITIONREVIEW THE POSITION

USE OF JOB DESCRIPTIONSUSE OF JOB DESCRIPTIONS

UPDATE TO REFLECT ACTUAL WORKUPDATE TO REFLECT ACTUAL WORK

MONITOR ACTIVITIES AND TRAIN MONITOR ACTIVITIES AND TRAIN REGIONAL MANAGERSREGIONAL MANAGERS

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AUDITING STATUSAUDITING STATUS

SELF EVALUATIONSELF EVALUATION

JOB SHADOWINGJOB SHADOWING

EVALUATIONSEVALUATIONS

POLICY MANUALS OR OPERATIONS MANUALSPOLICY MANUALS OR OPERATIONS MANUALS

INTERVIEW OF CO-WORKERS OR SUBORDINATESINTERVIEW OF CO-WORKERS OR SUBORDINATES

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Reductions in ForceReductions in Force

CA WARN ACTCA WARN ACT CA Labor Code Section 1400 et. seq.CA Labor Code Section 1400 et. seq.

75 or more employees within the proceeding 75 or more employees within the proceeding 12 months12 months

Layoff of 50 or more employees during any Layoff of 50 or more employees during any 30 day period30 day period

60 days notice to employees and EDD60 days notice to employees and EDD Back pay, Civil Penalty, Civil ActionBack pay, Civil Penalty, Civil Action

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2011 EMPLOYMENT UPDATE2011 EMPLOYMENT UPDATE

LEGISLATIVE UPDATELEGISLATIVE UPDATE NLRB Posting RequirementNLRB Posting Requirement

NLRB First Issues Final Rule Requiring PostingNLRB First Issues Final Rule Requiring Posting Must inform workers of right to organize a unionMust inform workers of right to organize a union Join or assist a unionJoin or assist a union Bargain collectivelyBargain collectively Discuss your wages or terms of employment with Discuss your wages or terms of employment with

other employees or unionother employees or union Take action with other employees to improve Take action with other employees to improve

conditionsconditions Strike and picketStrike and picket

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2011 EMPLOYMENT UPDATE2011 EMPLOYMENT UPDATE

NLRB POSTINGNLRB POSTING Originally contained November 14, 2011 Originally contained November 14, 2011

effective dateeffective date Lawsuit by manufacturing group Lawsuit by manufacturing group

challenging NLRB’s authoritychallenging NLRB’s authority October 5, 2011, NLRB delays posting October 5, 2011, NLRB delays posting

until January 31, 2011until January 31, 2011

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2011 EMPLOYMENT UPDATE2011 EMPLOYMENT UPDATE

SB 459SB 459 Tougher Sanctions for Willful Misclassification Tougher Sanctions for Willful Misclassification

of Employees as Independent Contractorsof Employees as Independent Contractors Allows Labor and Workforce Development Agency Allows Labor and Workforce Development Agency

(LWDA) to assess civil penalties for violations(LWDA) to assess civil penalties for violations Allows LWDA to notify CSLB in event licensed Allows LWDA to notify CSLB in event licensed

contractor violates lawcontractor violates law Allows Labor Commissioner to assess civil and Allows Labor Commissioner to assess civil and

liquidated damages against violationsliquidated damages against violations Joint and Several Liability for ConspiratorsJoint and Several Liability for Conspirators

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2011 EMPLOYMENT UPDATE2011 EMPLOYMENT UPDATE

AB 22AB 22 Prohibits Reliance on Credit Reports in Prohibits Reliance on Credit Reports in

hiringhiring Exceptions: Exceptions:

Department of JusticeDepartment of Justice Managerial positionsManagerial positions A sworn peace officerA sworn peace officer Position involving regular access to people’s bank Position involving regular access to people’s bank

recordsrecords

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2011 EMPLOYMENT UPDATE2011 EMPLOYMENT UPDATE

AB 469AB 469 Notice of Pay DetailsNotice of Pay Details

Pay rate and basis (hourly, Salary, etc…)Pay rate and basis (hourly, Salary, etc…) Allowances claimed as part of minimum wageAllowances claimed as part of minimum wage Regular paydayRegular payday Name of the employer (including DBAs)Name of the employer (including DBAs) Employers physical address and phone Employers physical address and phone

numbernumber Worker’s compensation carrier informationWorker’s compensation carrier information

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2011 EMPLOYMENT UPDATE2011 EMPLOYMENT UPDATE

AB 1396AB 1396 Requires written contracts for Requires written contracts for

commissioned employeescommissioned employees Former law applied only to foreign Former law applied only to foreign

employersemployers AB 1396 extends requirement to AB 1396 extends requirement to

California employersCalifornia employers January 1, 2013 deadlineJanuary 1, 2013 deadline

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2011 EMPLOYMENT UPDATE2011 EMPLOYMENT UPDATE

SB 299SB 299 Health benefits for 4 months during PDLHealth benefits for 4 months during PDL

Law has long required employers to provide 4 Law has long required employers to provide 4 months of disability leave for pregnancymonths of disability leave for pregnancy

Prior to SB 299, only had to provide same Prior to SB 299, only had to provide same benefits given to other disabled employeesbenefits given to other disabled employees

Now, must give same benefits given to non-Now, must give same benefits given to non-disabled employees (can require contributions)disabled employees (can require contributions)

Can require premium reimbursement if Can require premium reimbursement if employee fails to return to workemployee fails to return to work

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2011 EMPLOYMENT UPDATE2011 EMPLOYMENT UPDATE

New Case LawNew Case Law Brennan v. Townsend & O'Leary

Hostile work environment and sexual harassmentHostile work environment and sexual harassment Off-color santas at Christmas partiesOff-color santas at Christmas parties Plaintiff inadvertently obtained e-mail written by Plaintiff inadvertently obtained e-mail written by

another employee referring to her as “big titted” and another employee referring to her as “big titted” and “mindless”“mindless”

Plaintiff quit, claimed constructive discharge, and sued. Plaintiff quit, claimed constructive discharge, and sued. Jury found in her favor and awarded $250,000Jury found in her favor and awarded $250,000 Judge threw out the verdict finding no evidence of Judge threw out the verdict finding no evidence of

severe and pervasive conductsevere and pervasive conduct Appellate Court agreedAppellate Court agreed

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2011 EMPLOYMENT UPDATE2011 EMPLOYMENT UPDATE

Holmes v. PetrovichHolmes v. Petrovich Attorney-Client privilegeAttorney-Client privilege

Plaintiff claimed harassment and Plaintiff claimed harassment and discrimination based on pregnancydiscrimination based on pregnancy

Plaintiff e-mailed her attorney using Plaintiff e-mailed her attorney using company e-mail system before claiming company e-mail system before claiming constructive dischargeconstructive discharge

Company found e-mails and used them at Company found e-mails and used them at trial. trial.

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2011 EMPLOYMENT UPDATE2011 EMPLOYMENT UPDATE

Holmes v. PetrovichHolmes v. Petrovich Court found e-mails not privilegedCourt found e-mails not privileged

No expectation of privacyNo expectation of privacy Signed employee handbook stating 1.) e-Signed employee handbook stating 1.) e-

mail only for business purposes; 2.) mail only for business purposes; 2.) employee messages could be monitored at employee messages could be monitored at any time; 3.) e-mails were not private any time; 3.) e-mails were not private

Not clear if court would rule the same in Not clear if court would rule the same in absence of policyabsence of policy

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Brinker Brinker UpdateUpdate Issue: Must employers provide meal Issue: Must employers provide meal

periods or ensure they are takenperiods or ensure they are taken Oral argument scheduled for November Oral argument scheduled for November

8, 20118, 2011 Court, generally, has 90 days from oral Court, generally, has 90 days from oral

argument to issue a ruling. argument to issue a ruling.

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Brinker Brinker Update (Continued…)Update (Continued…) Hernandez v. Chipotle Mexican Grill, Hernandez v. Chipotle Mexican Grill,

Tien v. Tenent healthcare Corp., & Tien v. Tenent healthcare Corp., & Flores v. Lamps Plus, Inc. Flores v. Lamps Plus, Inc.

Court found employer must only provide Court found employer must only provide breaks. breaks.

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Hofferica v. St. Mary Medical Center FMLA Retaliation

Employee terminated after failing to return to work after taking FMLA leave

Claimed she simply required a brief leave extension

Defense prevailed on a motion to dismiss and Plaintiff appealed

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Hofferica v. St. Mary Medical Center (Continued…) Court found Plaintiff stated a valid claim

for FMLA Retaliation given the employer’s failure to return her calls

Employer treated her differently based on her FMLA leave given it returned her calls before she took leave

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Lu v. Hawaiian Gardens Casino, Inc.Lu v. Hawaiian Gardens Casino, Inc. Tip PoolingTip Pooling

Plaintiff served as card dealer in casinoPlaintiff served as card dealer in casino Required to set aside 15-20% of tips Required to set aside 15-20% of tips Plaintiff brought class actionPlaintiff brought class action Supreme Court granted review to determine Supreme Court granted review to determine

if violations of Labor Code section 351 if violations of Labor Code section 351 provides a private right of actionprovides a private right of action

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Lu v. Hawaiian Gardens Casino, Inc. Lu v. Hawaiian Gardens Casino, Inc. (Continued…)(Continued…) Section 351 prohibits employers from taking Section 351 prohibits employers from taking

employees’ tips. employees’ tips. Statute must manifest an intent to create a Statute must manifest an intent to create a

private right of actionprivate right of action Two ways: 1.) Expressly states that a person is Two ways: 1.) Expressly states that a person is

liable for a cause of action for violating the liable for a cause of action for violating the statute; or 2.) refer to a remedy or means of statute; or 2.) refer to a remedy or means of enforcing its substantive provisions.enforcing its substantive provisions.

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Lu v. Hawaiian Gardens Casino, Inc. Lu v. Hawaiian Gardens Casino, Inc. (Continued…)(Continued…) Section 351 states that violators subject Section 351 states that violators subject

to misdemeanor and states that the to misdemeanor and states that the Department of Industrial Relations “shall Department of Industrial Relations “shall enforce the provisions of the article.” enforce the provisions of the article.”

Found this was inconsistent with Found this was inconsistent with legislative intent to create a private legislative intent to create a private right of action. right of action.

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Futrell v. Payday, Inc.Futrell v. Payday, Inc. Payroll company as joint employerPayroll company as joint employer

Employee sued employer and payroll processing Employee sued employer and payroll processing company claiming they were joint employers company claiming they were joint employers liable for wage and hour violationsliable for wage and hour violations

Payroll company 1.) did not hire/fire; 2.) control Payroll company 1.) did not hire/fire; 2.) control work; 3.) set wages; 4.) supervise work; or 5.) set work; 3.) set wages; 4.) supervise work; or 5.) set schedule. Payroll company did 1.) complete schedule. Payroll company did 1.) complete timecards; 2.) complete employee information timecards; 2.) complete employee information sheets; 3.) employment eligibility verifications; 4.) sheets; 3.) employment eligibility verifications; 4.) W-4 certificates. W-4 certificates.

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2011 EMPLOYMENT UPDATE2011 EMPLOYMENT UPDATE Futrell v. Payday, Inc.Futrell v. Payday, Inc. (Continued…)(Continued…)

Pay stubs identified the payroll company as Pay stubs identified the payroll company as the employer of recordthe employer of record

Trial Court granted summary judgment in Trial Court granted summary judgment in favor of payroll companyfavor of payroll company

Appellate Court affirmedAppellate Court affirmed Labor Code identifies employer as entity Labor Code identifies employer as entity

responsible for wages, hours, and working responsible for wages, hours, and working conditions. Processing of wages does not conditions. Processing of wages does not qualifyqualify

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Thompson v. North Am. Stainless, LPThompson v. North Am. Stainless, LP U.S. Supreme CourtU.S. Supreme Court

Plaintiff and fiancé employees of NAS. Plaintiff and fiancé employees of NAS. Fiancé files claim of sex discrimination with Fiancé files claim of sex discrimination with

EEOCEEOC Three weeks later, NAS terminates Plaintiff. Three weeks later, NAS terminates Plaintiff. Plaintiff sues alleging retaliation. Plaintiff sues alleging retaliation. Trial court and Sixth Circuit dismissed claims Trial court and Sixth Circuit dismissed claims

finding that Title VII does not permit third-finding that Title VII does not permit third-party relations claims party relations claims

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Thompson v. North Am. Stainless, LPThompson v. North Am. Stainless, LP (Continued…)(Continued…) Supreme Court reversed Sixth CircuitSupreme Court reversed Sixth Circuit The court found it is “obvious that a The court found it is “obvious that a

reasonable worker might be dissuaded reasonable worker might be dissuaded from engaging in protected activity if from engaging in protected activity if she knew her fiancé would be fired.” she knew her fiancé would be fired.”

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United Parcel Serv. v. Superior CourtUnited Parcel Serv. v. Superior Court Premium payments for missed meal and Premium payments for missed meal and

rest breaksrest breaks Labor Code section 226.7 allows Labor Code section 226.7 allows

employee that misses a meal or rest employee that misses a meal or rest period to receive one additional hour of period to receive one additional hour of pay as a premium payment. pay as a premium payment.

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Issue: One hour per day as penalty, or one Issue: One hour per day as penalty, or one hour per violation? hour per violation?

Court found that employees get one hour Court found that employees get one hour of pay per violationof pay per violation

Get two hours of pay per day if miss both Get two hours of pay per day if miss both a meal and rest breaka meal and rest break

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Dukes v. Wal-MartDukes v. Wal-Mart Plaintiffs claimed that policy allowing local Plaintiffs claimed that policy allowing local

discretion for employment decisions has discretion for employment decisions has disproportionate impact on female disproportionate impact on female employeesemployees

Trial court and Ninth Circuit certified classTrial court and Ninth Circuit certified class U.S. Supreme Court reversed, finding that U.S. Supreme Court reversed, finding that

commonality absentcommonality absent Requires significant proof that Wal-Mart operated Requires significant proof that Wal-Mart operated

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Dukes v. Wal-Mart (Continued…)Dukes v. Wal-Mart (Continued…) Critical to finding: Critical to finding:

Wal-Mart has anti-discrimination policyWal-Mart has anti-discrimination policy Policy of allowing local discretion is a policy Policy of allowing local discretion is a policy

against against discriminationdiscrimination Left to their own devices, most managers Left to their own devices, most managers

will select sex-neutral, performance-based will select sex-neutral, performance-based criteria for hiring and promotion. criteria for hiring and promotion.

Company’s size was critical to decisionCompany’s size was critical to decision

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