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The Shifting Job Market in California, and the Emerging Challenges for Employers California Payroll Conference September 12, 2014. James Brown Partner, San Francisco, CA [email protected] 415.781.7900 - PowerPoint PPT Presentation
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The Shifting Job Market in California, and the Emerging Challenges for Employers
California Payroll Conference September 12, 2014
James Brown Partner, San Francisco, CA
[email protected] 415.781.7900
Jim Brown is the co-Chair of the firm's Employment and Labor Law Group. Mr.
Brown represents clients before state and federal courts and enforcement
agencies.
Michael Bernick Special Counsel, San Francisco, CA
[email protected] 415.781.7900
Michael S. Bernick joined Sedgwick after serving for nearly five years (1999-2004)
as director of the California Employment Development Department (EDD), the
10,000-person state department of labor.
.
Job Volatility: Enormous Job Creation on an On-Going Basis
1992
1993
1994
1994
1995
1996
1997
1997
1998
1999
2000
2000
2001
2002
2003
2003
2004
2005
2006
2006
2007
2008
2009
2009
2010
2011
5,000
5,500
6,000
6,500
7,000
7,500
8,000
8,500
9,000
9,500
Enormous Job Creation Each QuarterQuarterly Gross Job Gains, 1992-2011 (in thousands)
Job Volatility: Enormous Job Destruction on an On-Going Basis
1992
1993
1994
1994
1995
1996
1997
1997
1998
1999
2000
2000
2001
2002
2003
2003
2004
2005
2006
2006
2007
2008
2009
2009
2010
2011
5,000
5,500
6,000
6,500
7,000
7,500
8,000
8,500
9,000
Enormous Job Destruction Each QuarterQuarterly Job Losses, 1992-2011 (in thousands)
Job Volatility: Movement of Workers Among Jobs-Separations
2000 2001 2001 2002 2002 2003 2003 2004 2004 2005 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 2011 20123,000
3,500
4,000
4,500
5,000
5,500
6,000
Enormous On-Going Worker Movement Monthly Separations, 2000-2012 (in thousands)
Job Volatility: Movement of Workers Among Jobs-Hires
20002001200120022002200320032003200420042005200520052006200620072007200820082008200920092010201020102011201120120
1000
2000
3000
4000
5000
6000
7000
Enormous On-Going Worker MovementMonthly Hires, 2000-2012 (in thousands)
Job Volatility: Average Job Openings On Any Given Day (In Thousands)
Job Volatility: Number of Job Seekers Per Job
2000 2001 2001 2002 2002 2003 2003 2004 2004 2005 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 2011 2012 20120.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
Number of Unemployed per Job Opening, 2000-2013
Breakdown in Full Time Employment and Rise of Project Based, Contingent and Part-Time Employment
1995 1997 1999 2001 20050
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
8,309 8,456 8,247 8,58510,342
1,968 1,996 2,032 2,089
2,4541,181 1,300 1,188
1,169
1,217
652809 769 633
813
Workers in Alternative Employment Arrangements, 1995-2005 (in thousands)
Independent contractors On-call workers Temporary help agency workers Employees of contract firms
Wo
rker
s (0
00s)
Growth in Involuntary Part-Time Employment
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014*
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
Growth in Part-Time Employment (Involuntary)
Seasonally adjusted January data
Thousands employed
Growth in Staffing Industry
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014*
0
500
1,000
1,500
2,000
2,500
3,000
Temporary Help Services Employment, 1990-2014
Seasonally adjusted January data
Thousand Employees
Growth in the “Knowledge Economy” Jobs
Public Relations Specialists
Pharmacists
Network and Computer Systems Administrators
Human Resources, Training, and Labor Relations Specialists, All Other
Market Research Analysts and Marketing Specialists
Lawyers
Middle School Teachers, Except Special and Career/Technical Education
Management Analysts
Secondary School Teachers, Except Special and Career/Technical Education
Elementary School Teachers, Except Special Education
127.2128.3139.6141.9155.3159.7165.3168
191.8197.9
212222.5
249.3250.7
274.3305.1
355.6452.1
573.2586.1
"The Knowledge Economy" Projected Openings 2010-2020
(in 000s)
Greater Growth in Practical Economy Jobs
Janitors and Cleaners, Except Maids and Housekeeping Cleaners
Home Health Aides
Customer Service Representatives
Laborers and Freight, Stock, and Material Movers, Hand
Office Clerks, General
Combined Food Preparation and Serving Workers, Including Fast Food
Registered Nurses
Waiters and Waitresses
Cashiers
Retail Salespersons
0 500 1,000 1,500 2,000 2,500
246.4
706.3
338.4
319.1
489.5
398.0
711.9
195.9
250.2
706.8
682.0
837.5
959.6
980.2
1,011.5
1,146.5
1,207.4
1,324.3
1,775.9
1,958.7
Top Ten Occupations by Openings, 2010-2020
Total Openings
Growth
Job Growth and Educational Levels Required
Job GrowthJob Openings (including replacement)
0
10,000
20,000
30,000
40,000
50,000
60,000
U.S. Job Change 2010-2020: Job Growth and Openings (000s)
Doctoral or pro-fessional
Master's
Bachelor's
Associate's
Postsecondary non-degree
Some college, no degree
High school
Less than high school
Minimum Wage Issues In California
Minimum Wage Issues in California: The Wrath of Armenta v. Osmose, Inc.
Armenta v. Osmose, Inc., 135 Cal.App.4th 314 (2005):
• CA law requires employers to pay the minimum wage for each and every compensable hour of work performed.
• Employers cannot average out the total amount of pay through per diem, salary, or hourly wage payments to determine if an employee has been paid the minimum wage for all hours worked.
Minimum Wage Issues In California
Minimum Wage Issues in California: The Wrath of Armenta v. Osmose, Inc.
• Piece work or commission pay cannot be
averaged for purposes of minimum wages
during non-sales/non-production time.
FCRA ONSLAUGHT OF CLASS ACTIONS
Background Check Litigation – It Seemed Like a Good Idea at the Time!
FCRA Onslaught of Class Actions
Whole Foods Markets CEC Entertainment (Chuck E. Cheese’s) Extended Stay Hotels O’Reilly Automotive Stores Century 21 Department Stores Axcess Financial Services (Check ‘N Go) Nine West Panera American Multi-Cinema Lexis-Nexis Kelly Services, Inc. Cathay Bank
Companies Facing Class Actions Filed This Year
FCRA Onslaught of Class Actions
Key Allegations in Class Actions
No “stand alone” disclosure “At-will” employment reference Release of liability included No “” box to request a copy Included as part of job application document Equal Employment Opportunity affirmation
FCRA Onslaught of Class Actions
Background Check Litigation – Best Practices
• No “pro-forma” background checks on all applicants. California limits the use of credit reports. “Ban the box” ordinances, such as San Francisco’s Fair
Chance Ordinance, limit the timing and use of criminal history inquiries.
• Check your forms –The disclosure and authorization form should be a stand-alone form No release of liability No “at-will” affirmation Allow applicant to request copy
• Check industry specific rules.
Commission Agreement Issues
The Biggest Problems We See with Commission Agreements
The commission agreement is not in writing signed by the employee and/or the employer fails to provide an employee with a receipt in violation of Labor Code § 2751.
No clear definition of when commission “earned”
The agreement provides for illegal chargebacks.
The agreement fails to guarantee minimum required payments, such as minimum wage, 1.5 times the minimum wage for inside sales employees, and overtime on commissions for nonexempt employees.
1
2
3
4
Misclassification-IC v EE
Independent Contractors – Don’t Be a Control Freak
• The biggest issue is still the right to control the details (or manner and means) by which the work is performed to accomplish the desired result.
• Standard company practices and policies — such as standardized form contracts for independent contractors increase chance of class action.
• Labor Code § 226.8, which prohibits intentional misclassification.
Misclassification–Exempt v. Non-Exempt
The Battle Continues
• Plaintiffs’ attorneys are increasingly focusing on sales
exemptions Inside sales exemptions are limited (Wage Orders 4 and 7) Outside sales – are they actually engaged in sales away
from the employer’s place of business more than 50% of
the time? “Home” office work doesn’t count.
Misclassification–Exempt v. Non-Exempt
The Battle Continues
• As minimum wage increases take effect, the minimum salary for California white collar employees is also automatically increasing.
• Exemptions should be based on a realistic assessment of job duties.
July 1, 2014:
Minimum wage went from $8.00 to $9.00 per hour.
This is the equivalent of $720 per week, $3,120 per month, and $37,440 per year
January 1, 2016:
Minimum wage goes to $10.00 per hour.
This is the equivalent of $800 per week, $3,466.67 per month, and $41,600.04 per year.
Off-the-Clock Work (After-Hours Emails, Preparation Time Issues, etc)
Tracking Time and Avoiding Off-the-Clock Claims
• Require nonexempt employees to report all of their work time and structure their work as much as possible to avoid the need to perform work outside of standard business hours. Watch out for duties to be performed outside of regular work hours:
Tracking and responding to emails and/or work-related telephone calls.
Writing reports and/or transmitting work-related data (whether electronic or on paper).
Planning travel routes, reviewing documents, and/or rehearsing presentations.
Overly restrictive on call requirements.• Don’t transform commute time into compensable travel time.• Dangers of rounding practices.