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Legislation: Employment Law...

California Labor Code: Misclassification of Employees (effective 1/1/12)

Avoiding employee status for an individual by voluntarily and knowingly misclassifying that individual as an independent contractor is unlawful and subjects the employer to civil penalties and the poising of a notice of the violation(s). It is also unlawful to charge that individual for equipment or other materials that the employer is obligated to provide to an employee.

[For additional information see the October 25, 2011 GMK Alert.]

California Labor Code: Wage Payment/Other Information to Employee (effective 1/1/12)

An employer must, at the time of hire, provide each employee with a written notice that includes pay information and the name, address, and phone number of the employer and the employer’s workers’ compensation carrier.

[For additional information see the October 25, 2011 GMK Alert.]

California Background Checks: Use of Consumer Credit Reports for Employment Purposes (effective 1/1/12)

An employer (other than certain financial institutions) may not obtain or use a credit report for employment purposes unless the individual is applying for or otherwise being considered for a position which involves significant managerial authority or access to personal or company confidential information; access to or authority over funds and/or finances of the company; or is a law enforcement position.

[For additional information see the October 14, 2011 GMK Alert.]

California Pregnancy Disability Leave: Payment of Health Insurance Premiums; Additional Unlawful Employment Practice (effective 1/1/12)

All employers with five (5) or more employees in California will be required to maintain health insurance for employees on pregnancy leave on the same basis as if the employee was working if the employee is disabled by the pregnancy or a pregnancy-related condition for up to four (4) months.

It is an unlawful employment practice for an employer to interfere with, restrain, or deny the exercise of, or the attempt to exercise, an employee’s right to take CFRA or pregnancy disability leave.

[For additional information see the October 14, 2011 GMK Alert.]

California Labor Code: Written Commission Agreements (effective 1/1/13)

By January 1, 2013, every employer who pays employees for services rendered in California on a commission basis must have a written agreement with the employee which sets forth the basis on which commissions are to be paid. The employer must give a signed copy of the agreement to every employee to whom commissions are to be paid and obtain a signed acknowledgment of receipt from each such employee.

[For additional information see the October 14, 2011 GMK Alert.]

California Fair Employment and Housing Act: Genetic Information Discrimination (effective 1/1/12)

This legislation adds “genetic information” [as in the recently enacted federal Genetic Information Nondiscrimination Act (GINA)] to the bases on which discrimination is prohibited in California.

California Labor Code: Liquidated Damages – Labor Commissioner Complaints (effective 1/1/12)

This statutory change allows an employee to recover, in addition to the wages due, liquidated damages (the amount improperly withheld plus interest) in a claim filed with the Labor Commissioner for underpayment of minimum wage. Previously liquidated damages were only available in a court action.

California Labor Code: Cal/OSHA – Definition of “serious violation” (effective 1/1/11)

This legislation repealed the previous definition of “serious violation” as one in which there is a “substantial probability” that death or serious physical harm could result from a violation; and established a rebuttable presumption that a “serious violation” exists when there is a “realistic possibility” that death or serious physical harm could result from the actual hazard created by the violation. In determining whether to issue a serious violation the following factors are to be considered: training for employees and supervisors on prevention of exposure to the hazard; the employer’s procedures for discovering, controlling and correcting the hazard; supervision of employees exposed to the hazard; and other information from the employer explaining why a serious violation does not exist.

California Labor Code: Organ/Bone Marrow Donor Leave (effective 1/1/11; amended 8/1/11)

The Michelle Maykin Memorial Donation Act requires employers with 15 or more employees to provide employees with paid time off for the purpose of donating an organ (30 days in a one-year period) or bone marrow (5 days in a one-year period). The leave may be taken all at once or in increments and such leave shall not be taken concurrently with federal Family and Medical Leave Act leave or California Family Rights Act Leave. The employer may require the employee to use accrued sick or vacation leave (up to two weeks for organ donation and up to 5 days for bone marrow donation). Benefits must be maintained during the leave; the employee must be reinstated to his/her same or an equivalent position; and an employee may not be subject to retaliation for having requested or taken the leave.

Runyon v. Board of Trustees of the California State University

A tenured university professor claimed he was removed as chair of a department in the College of Business Administration at Cal State Long Beach, by the College’s dean, in retaliation for whistleblowing activities. The University investigated his complaint pursuant to an internal process, and found the professor’s claim of retaliation to be without merit. The professor filed a civil action against the under California Govt. Code Sec. 8547.12, which is part of the California Whistleblower Protection Act. That particular statute applies solely to CSU employees. The University and the Dean, represented by Robert Conti, who is now the partner in charge of GMK’s employment and civil litigation department, filed a motion for summary judgment which the Superior Court judge granted.

The professor appealed. The California Court of Appeal, Second District, affirmed the trial court’s ruling. The appellate court ruled that the only way the professor could challenge the administrative decision by filing, and winning, a writ of mandate.

No match letters

The United States Immigration and Customs Enforcement adopted procedures for employers to follow receiving “No Match” letters from the Social Security Administration and/or Homeland Security. Employers are required to make affirmative efforts to resolve no match disputes within 30 days and take further action to resolve dispute if the no match cannot be resolved within 90 days. Enforcement of the procedures, however, has been enjoined by a United States District Court. Nevertheless, employers who receive no match letters should consult with legal counsel in order to ensure compliance with the law as it currently stands. Additional information on the no match requirements can be found at

New I-9 Form

A new Form I 9 that the employers must use to verify employment eligibility of all new hires and re-verification has been issued. Employers who are not using the new I-9 Form as of December of last year are subject to penalties. The form only has to be used for new employees and re-verifications. Current employees do not need to complete new forms, unless the employee’s status needs to be re-verified on other grounds. The new form may be found at

Sexual harassment training

The California Fair Employment House Commission has provided new regulations regarding the requirements for sexual harassment training for supervisors. It also clarifies the 50 employee threshold for employers to be covered by the sexual harassment training law includes employees outside of California.

Child support

Stiff penalties consisting of up to three times the amount of the assistance provided, subject to maximum of the entire support obligation, can be imposed against employers or other persons who assist employees or contractors in avoiding child support obligations. It applies where an employer knew or should have known that the individual has a child support obligation and fails to report the employee’s hire, employment and/or wages to the Employment Development Department.

Workplace violence

Employers may now seek temporary restraining orders on behalf of multiple employees at multiple locations where appropriate. It also provides that employers can seek a TRO where an employee who is directly threatened does not want to pursue obtaining a TRO.

Pay stub requirements

Prior law required that an employee’s entire Social Security number appear on the paycheck pay stub. This has been changed so that only the last four digits of the Social Security number may appear on the pay stub.

Cell phone restrictions

Starting July 1, 2008, drivers may not use hand held cell phones while operating vehicles, unless the phone is designed and configured for hands free listening and talking and is used in that manner while driving.

Alternative work week schedule for pharmacists

The alternative work week schedule that applies to employees in the health care industry and other alternative work week schedules permitted under California Wage Order No. 4 now apply to pharmacists. By complying with the legal requirements contained in the wage hour orders, California employers may implement a regularly scheduled alternative work week schedule of not more than ten hours per day within a 40 hour work week, without having to pay non-exempt employees overtime premiums.

Healthcare whistleblowers

The Health and Safety Code whistleblower provisions now cover physicians and surgeons who complain about unsafe patient care. This expands the law which previously had only applied to patients and employees.

Leaves for qualified military spouses

This law became effective October 9, 2007, and requires all employers with 25 or more employees give up to ten days of unpaid time off to spouses of military members who are on leave for deployment in combat. The employee must, however, provide reasonable notice.

Privacy Laws

The data notification laws now include information concerning medical and health insurance information. Any business owner licensing such data must notify all affected California residents (including employees or applicants) of any breach or disclosure that may compromise the confidentiality of this information.

Decrease in minimum hourly rate for exempt, hourly paid computer software professionals

The minimum hourly wage necessary for computer software professionals to maintain exempt status was lowered from $49.77 to $36.00.

Minimum wage

California’s minimum wage is now $8.00 per hour, up from $7.50, effective January 1, 2008.

Employees who have been rated QIW and can no longer perform their jobs

The firm has received a lot of questions about what to do with employees who have been rated QIW and can no longer perform their jobs.

There are some basic concerns that need to be taken into consideration when dealing with this kind of situation in order to avoid civil liability under the Americans with Disabilities Act and/or the California Fair Employment and Housing Act, and even LC 132a.

1. Just because employees are rated QIW does not automatically mean that the employer can terminate the relationship. The standard under California law is whether the employee suffers some kind of limitation on a major life activity that affects his or her ability to perform the essential functions of the job, rather than unable to perform the usual and customary job duties.

2. Employers are legally obligated to undergo a reasonable accommodation analysis, to determine whether there is any kind of accommodation that would allow the employee to perform the job’s essential functions. If the employee cannot perform marginal functions, then those marginal functions must be removed from the list of the employee’s duties. The employer does not, however, need to eliminate essential functions. The accommodation, however, cannot impose an undue burden on the employer, and it does not have to necessarily be the accommodation the employee desires. Unless it would be demonstrably futile to undergo the process, the employer must engage in an interactive exchange, i.e. brainstorming session, with the affected employee to meet this legal requirement. Not doing this can, on its own, subject the employer to legal liability.

3. If it is determined that there is no reasonable accommodation available, the employer must look within the organization to determine whether there is some open position that the employee can fill, either with or without reasonable accommodation. If so, even if it’s at a lower pay grade, then the position must be offered to the employee, as long as the employee’s competent to fill it. You do not need to promote an employee as a reasonable accommodation, nor does the employer have to create a position.

4. Placing an employee in a temporary light duty position while recovering from an industrial injury does not create a permanent position for purposes of the ADA/FEHA.

Large employers with separate departments handling workers’ compensation claims and employment related matters need to coordinate when dealing with the industrially injured employee with regard to return to work evaluations. As always, the above guidelines provide merely an overview of the law. Employers facing these kinds of situations should consult the advise of employment counsel.