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The Advisor Employer Advisory Council of Orange County, Inc. Volume 33 No 2• Spring 2013 WHAT’S INSIDE Page 2.......................Presidents Message Page 3…………California Supreme Court Issues Employer-Friendly Decision on Mixed-Motive Defense Page 3........ Final HIPAA Regulations Released: Time to Review Your HIPAA Policies? Page 7 ……… “That Can’t Be right!” California Appellate Court Rules that Piece Rate Workers Are Entitled to Separate Hourly Compensation. Page 10…………..2013 CEAC Legislative Update Page 11 . Calendar of 2013 Workshops Page 12……… Invitation to Join EAC-OC Page 13…….… 2013 Certificate Program information and registration form Page 15 ................... EDD Orange County Locations A Publication of the Employer Advisory Council of Orange County in partnership with the Employment Development Department, State of California Are We There Yet? California Appellate Court Rules There Is No Statutory Cap for Pregnancy-Disability Leave by Margaret Gillespie, Littler Mendelson The interplay among state and federal employment leave requirements can be confusing and often becomes a trap for the unwary, as occurred in the recent case of Sanchez v. Swissport, Inc., No. B237761 (Cal. Ct. App. Feb. 21, 2013). In a case of first impression, the court in Sanchez concluded that an employee who has exhausted all permissible leave under California's Pregnancy Disability Leave statute (PDL) and the California Family Rights Act (CFRA) nevertheless may sue her employer for refusing to give her additional leave under separate provisions of California's Fair Employment and Housing Act (FEHA). > > > 4 Department of Labor Publishes New Family Medical Leave Act (FMLA) Regulations by Cathie L. Fields, Tina L Kannarr and Todd A. Goluba, Atkinson, Andelson, Loya, Ruud & Romo The U.S. Department of Labor recently published new regulations under the FMLA that took effect March 8, 2013. Employers covered by the FMLA, including school and community college districts, should post the new FMLA poster immediately and ensure their FMLA policies comply with these latest requirements. The new regulations make changes to qualifying exigency and military caregiver leave, intermittent leave, record keeping, and model certification forms. Specifically, they: > > > 5

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Page 1: Employer Advisory Council of Orange County, Inc. The Advisor Advisor - EAC of Orange Co... · Employer Advisory Council of Orange County in partnership with the Employment Development

The Advisor Employer Advisory Council of Orange County, Inc.

Volume 33 No 2• Spring 2013

WHAT’S INSIDE

Page 2.......................Presidents Message

Page 3…………California Supreme Court

Issues Employer-Friendly

Decision on Mixed-Motive

Defense

Page 3…....….... Final HIPAA Regulations

Released: Time to Review Your

HIPAA Policies?

Page 7 ……… “That Can’t Be right!”

California Appellate Court Rules

that Piece Rate Workers Are

Entitled to Separate Hourly

Compensation.

Page 10…………..2013 CEAC Legislative

Update

Page 11 …. Calendar of 2013 Workshops

Page 12……… Invitation to Join EAC-OC

Page 13…….… 2013 Certificate Program

information and registration

form

Page 15 ................... EDD Orange County

Locations

A Publication of the

Employer Advisory Council

of Orange County in

partnership with the

Employment Development

Department, State of

California

Are We There Yet? California Appellate Court Rules There Is No Statutory Cap for

Pregnancy-Disability Leave by Margaret Gillespie, Littler Mendelson

The interplay among state and federal employment leave requirements can be confusing and often becomes a trap for the unwary, as occurred in the recent case of Sanchez v. Swissport, Inc., No. B237761 (Cal. Ct. App. Feb. 21, 2013).

In a case of first impression, the court in Sanchez concluded that an employee who has exhausted all permissible leave under California's Pregnancy Disability Leave statute (PDL) and the California Family Rights Act (CFRA) nevertheless may sue her employer for refusing to give her additional leave under separate provisions of California's Fair Employment and Housing Act (FEHA).

> > > 4

Department of Labor Publishes New Family Medical Leave Act (FMLA)

Regulations by Cathie L. Fields, Tina L Kannarr and Todd A. Goluba, Atkinson,

Andelson, Loya, Ruud & Romo

The U.S. Department of Labor recently published new regulations under the FMLA that took effect March 8, 2013. Employers covered by the FMLA, including school and community college districts, should post the new FMLA poster immediately and ensure their FMLA policies comply with these latest requirements. The new regulations make changes to qualifying exigency and military caregiver leave, intermittent leave, record keeping, and model certification forms. Specifically, they:

> > > 5

Page 2: Employer Advisory Council of Orange County, Inc. The Advisor Advisor - EAC of Orange Co... · Employer Advisory Council of Orange County in partnership with the Employment Development

OFFICERS – 2013

Stewart Lerner – President Lerner & Associates

Brea, California

Nick Teel – Secretary/Treasurer Moseys’ Production Machinists, Inc.

Anaheim, California

EAC-OC Office – Barbara Bivens, Administrator 16033 Bolsa Chica Road #104-615

Huntington Beach, CA 92649 Phone: 714/846-2510 • Fax: 714/844-4779

email: [email protected]

EAC-OC/EDD COORDINATOR Nicole Gregory - EDD Job Service

Tel 714-565-2664 fax 714-543-9355 Email [email protected]

Christi Reis – Director at Large Moseys’ Production Machinists, Inc.

Anaheim, California

Jim Hart, Esq. – Advisor Editor Littler Mendelson Irvine, California

Linda Johnson – Director at Large

Robert Orozco, Esq. – Program Committee Chair

Ford & Harrison Los Angeles, California

Debbi Peterson – Director at Large

PVP Advanced EO Systems Tustin, California

Walt Storch – Website Chair

Elkins-Jones Insurance Agency Irvine, California

EAC-OC OFFICE EAC-OC/EDD COORDINATOR

BOARD OF DIRECTORS

2

President’s Message by Stewart Lerner, Lerner & Associates

The past several months have been busy ones for new legislation kicking in and for a large number of changes orchestrated by a variety of state and federal agencies. Hopefully, you have taken the time to read the various Alerts we have sent to update you on many of these changes. It is always gratifying to hear from our members that we were the FIRST organization to provide them with information in the majority of these areas.

Because these Alerts are designed to provide you quick access to information, they often are not the fully fleshed out articles you see in the Advisor newsletter. For this reason, you will see much of this information repeated in more detail in this edition. I want to once again thank our Advisor Editor, Jim Hart, for all his work in putting this together.

I want to call your attention to two events that will be coming up shortly. The first is our workshop on Workplace Investigations scheduled for April 18 and 25. As you know, we provide Sexual Harassment Prevention Training every two years to allow you to receive the certification you may need to comply with the State’s mandated supervisory training requirement. After our session last year, a number of members asked for more information on how to conduct the interviews with employees that might be required to complete their harassment or discrimination investigations.

To meet this need, attorney Keith Watts will be doing a brand new program zeroing in on how to do a proper follow-up with your employees in these difficult and sometimes risky situations.

In May, there will be another first. Your EAC will not be presenting a program that month so that we can support the Statewide California Employer Advisory Council (CEAC) Conference in Ontario on May 9th. The CEAC is the parent organization for all the EACs in California and provides us with a valuable linkage with our EDD partners at the Sacramento level. This event is their major fundraiser for the year and offers a full day of excellent workshops for employers around the state.

All of you on our mailing list will be receiving a conference brochure and we encourage you to support this important and worthwhile conference.

I look forward to seeing you at the April and May events.

Page 3: Employer Advisory Council of Orange County, Inc. The Advisor Advisor - EAC of Orange Co... · Employer Advisory Council of Orange County in partnership with the Employment Development

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California Supreme Court Issues Employer-Friendly Decision on

Mixed-Motive Defense by Ellen Connelly Cohen and Paula M. Weber, Pillsbury

On February 7, 2013, the California Supreme Court issued a unanimous opinion in Harris v. City of Santa Monica. The California high court upheld the “mixed-motive” defense in cases brought under California’s Fair Employment and Housing Act (“FEHA”). The court’s decision is viewed by many as a compromise decision, but it does raise the bar for what a plaintiff employee must prove in order to prevail, and also limits the relief available even when the employee meets the new higher burden.

Harris Facts and Background

Wynona Harris was hired as a bus driver for the City of Santa Monica in October 2004. Shortly into her 40-day training period, she had an accident, which her employer deemed “preventable.” Harris ultimately passed her training period and entered into a three-month probationary period, during which she was involved in a second “preventable” accident. Shortly thereafter, Harris incurred a “miss-out” for failure to timely notify her supervisor that she would not report for an assigned shift. When Harris received a written performance evaluation covering her first three months of employment, her overall performance rating was “further development needed.” The very next month, Harris incurred her second “miss-out.” Two weeks later, Harris informed her supervisor that she was pregnant. The supervisor asked Harris to obtain a doctor’s note clearing her to continue working. On the same morning Harris gave her supervisor the doctor’s note, the supervisor received a list of probationary drivers who were not meeting standards for continued employment. Harris’s name was on the list. Her last day on the job was two days later.

Harris sued the City. She claimed that she was fired because she was pregnant, a form of sex discrimination under FEHA. The City denied Harris’s allegations and claimed that it had legitimate,

> > > 6

Final HIPAA Regulations Released: Time to Review Your

HIPAA Policies? by T. Downs, I. Lee and S. Wagner, FordHarrison LLP

Executive Summary: The U.S. Department of Health and Human Services ("HHS") recently released long-awaited final HIPAA Regulations. The new regulations finalize many changes previously proposed to the Privacy, Security, and Enforcement Rules, and modify the Breach Notification Rule initially adopted in August 2009. In addition, the new regulations extend HIPAA application to Business Associates.

The new Rules will be effective on March 26, 2013, with a compliance period of 180 days. All covered entities must comply with the new Rules by September 23, 2013.

Brief Overview of Final Regulations:

New Breach Notification Rule. Notably, the new regulations provide for a new Breach Notification Rule. That new rule provides that an impermissible acquisition, access, or use or disclosure of PHI is presumed to be a breach unless the covered entity or business associate demonstrates that there is a low probability that the PHI has been compromised based on a risk assessment using four factors:

1. the nature and extent of the PHI involved, including the types of identifiers and likelihood of re-identification;

2. the unauthorized person who used the PHI or to whom the disclosure of PHI was made;

3. whether the PHI was actually viewed or acquired or, alternatively, if only the opportunity existed for the information to be viewed or acquired; and

4. the extent to which the risk to the PHI has been mitigated.

New Definitions. In addition, the new regulations modify various definitions and create new rules related to: Access to Records, Business Associates, Decedents, Electronic Media, Health Care Operations, Fundraising, Immunization Records, Marketing, Notifications to Persons involved in

> > > 7

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Are We There Yet… from Page 1

The plaintiff was employed by defendant Swissport, Inc. when she became pregnant. A few weeks into her pregnancy she was diagnosed with a high-risk pregnancy, requiring bed rest for the remainder of her pregnancy. She requested leave from work, which Swissport initially granted. After 19 weeks of leave – with three months left to go on her pregnancy – the plaintiff's employment was terminated because she had exhausted all available PDL and CFRA leave and was unable to return to work. The plaintiff then filed suit, asserting that Swissport was liable for failing to grant her additional leave under the FEHA.

Swissport filed a demurrer (i.e., a motion to dismiss) to the complaint and argued that, because it had provided the plaintiff with the four months of disability leave mandated by the PDL and CFRA, it necessarily had satisfied all of its obligations under the FEHA. The plaintiff opposed the motion by contending that she was also entitled to reasonable accommodation for her pregnancy-related disability under the FEHA, separate and apart from her leave rights under the PDL and CFRA. On reply, Swissport's position was summed up as follows: "The pregnancy disability statutes and regulations are clear: pregnancy disability leave is capped at four months. [The plaintiff] was permitted all of the pregnancy leave to which she was entitled, and her employment was terminated only when that leave expired and she was not able to return to work."

The trial court agreed with Swissport. In granting the motion to dismiss, the trial court concluded that Swissport's conduct in terminating the plaintiff "after her statutorily authorized pregnancy leave expired and . . . she was unable to return to work [was] expressly permitted under the Government Code."

The appellate court, however, disagreed. After analyzing the leave requirements of the PDL, CFRA, and FEHA, the appellate court concluded that the PDL was meant "to augment rather than supplant" the leave rights otherwise afforded by the FEHA. Thus, where an employee is disabled by pregnancy, she is entitled not only to 4 months of leave under the PDL, but also to a reasonable accommodation for her disability (including a longer leave of

absence) absent an undue hardship to the employer. The appellate court in Sanchez also held that employers must engage in the interactive process with employees disabled by pregnancy and pregnancy-related conditions just as they must do with employees disabled by other conditions.

What does this case mean for employers? In short, it means there is no statutory cap on pregnancy disability leave for employers with five or more employees. An employee disabled by pregnancy or pregnancy-related conditions may take up to 4 months of pregnancy-disability leave under the PDL and then also may be entitled to take additional open-ended leave as a reasonable accommodation for any continued pregnancy-related disability under the FEHA. Once the baby is born, and assuming the employee is eligible for CFRA leave, the employee may also be entitled to take another 12 weeks of CFRA leave for "baby bonding."1 In other words, an employee's pregnancy-related leave may last far longer than the pregnancy itself.

In the context of the Sanchez opinion, California employers also should be mindful of the new pregnancy disability leave regulations that went into effect on December 30, 2012. The new regulations expand the circumstances under which a woman may be viewed as "disabled by pregnancy," including severe morning sickness, gestational diabetes, pregnancy-induced hypertension, preeclampsia, and post-partum depression. The new regulations also clarify that a woman may be disabled by pregnancy if she needs time off for prenatal or postnatal care, bed rest, childbirth, loss or end of pregnancy, or recovery from childbirth or loss or end of pregnancy.2

> > > 5

__________________

1 But see Cal. Code Regs. tit. 2, § 7297.6(c)(1) (allowing an employer to apply the CFRA to an employee's pregnancy-disability leave when PDL is exhausted, but the child has not yet been born).

2 For a more detailed discussion of these new regulations, see Michelle Barrett, Lost in Translation: California's New Pregnancy Disability Leave Regulations and Their New, Contradictory Obligations, Littler ASAP (Jan. 4, 2013).

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Are We There Yet… from Page 4

With these recent developments in the laws surrounding pregnancy-disability leaves, California employers should review their leave of absence policies to ensure that they are compliant with current requirements. Employers also should review their policies and practices regarding disability accommodations to reflect the requirements for engaging in the interactive process and reasonably accommodating pregnancy, childbirth, and related medical conditions.

Reprinted with permission from Littler Mendelson. The author, Margaret Gillespie, can be reached at [email protected].

Medical Leave Act… from Page 1

Clarify that an employer may not require the employee to take more leave than necessary to address the circumstances that precipitated the need for leave, and that only leave actually taken may be counted against an employee’s FMLA entitlement.

Clarify that employers must track FMLA leave using the smallest increment of time used for other forms of leave subject to a one-hour maximum.

Roll back the earlier regulatory change that allowed employers to delay reinstatement where it is “physically impossible” for the employee to return to his or her job in the middle of the shift; the physical impossibility provision is to be applied in only the most limited circumstances, and the employer bears the responsibility to restore the employee to the same or equivalent position as soon as possible.

Update the record keeping requirements to specify the employer’s obligation to comply with the confidentiality requirements of the Genetic Information Non-Discrimination Act (GINA).

Expand “military member” to now include both members of the National Guard and Reserves and the Regular Armed Forces.

Replace the definition of “active duty” with “covered active duty,” which requires deployment to a foreign country.

Add a new qualifying exigency leave category for parental care leave, which allows eligible employees to take leave to care for a military member’s parent who is incapable of self-care when the care is necessitated by the member’s covered active duty.

Increase from 5 to 15 calendar days the maximum time an eligible employee may take for rest and recuperation qualifying exigency.

Expand military caregiver leave coverage to include covered veterans.

Expand the definition of “covered servicemember” to include covered veterans who are undergoing medical treatment, recuperation, or therapy for a serious injury or illness.

Clarify the definition of a serious injury or illness for a current servicemember to include injuries or illnesses that existed before the beginning of the member’s active duty and were aggravated by service in the line of duty on active duty in the Armed Forces.

Add to the list of required information for certification for qualifying exigency leave for rest and recuperation leave a copy of the military member’s Rest and Recuperation leave orders, or other documentation issued by the military setting forth the dates of the military member’s leave.

New FMLA forms and the new FMLA poster are available at: www.dol.gov/whd/fmla. Remember that California employers should ensure they use forms that meet California’s more stringent privacy requirements.

Reprinted with permission from Atkinson, Andelson, Loya, Ruud & Romo

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Mixed Motive… from Page 3

At trial, the City asked the court to instruct the jury in the “mixed-motive” affirmative defense. Essentially, this defense states that if the employer had both discriminatory and non-discriminatory reasons for firing an employee, the employer should not be found liable as long as the non-discriminatory reasons standing alone were sufficient to warrant dismissal. The trial court rejected the City’s mixed-motive instruction, and instead instructed the jury that Harris need only prove that discrimination was a “motivating factor/reason for the discharge.” The jury found that Harris’s pregnancy was indeed a motivating reason for the City’s decision to terminate her, and awarded Harris $177,905 in damages, including $150,000 in emotional distress damages. The City appealed, and ultimately the California Supreme Court granted review of the case to determine whether the challenged “motivating factor” jury instruction was correct.

The California Supreme Court’s Decision

While the California Supreme Court did not adopt the legal standard urged by the employer at trial, the decision in Harris contains several employer-friendly aspects. First, the court rejected the “motivating factor” instruction, which had been used in the standard CACI jury instructions, and held that the employee must instead prove that discrimination was a “substantial factor” – a higher standard – in the employer’s adverse employment decision. Next, the court held that even if the employee is successful in proving discrimination was a “substantial factor” in the employer’s decision, the employer’s liability is limited. If the employer is able to prove that it would have made the same decision even absent the discrimination, the employee’s remedies are limited to declaratory relief, injunctive relief, and attorney’s fees. The employee cannot obtain monetary damages, back pay, or reinstatement. The court explained that limiting the employer’s liability in this way would serve FEHA’s purpose of redressing, preventing, and deterring unlawful discrimination in the workplace while simultaneously denying employees an “unjustified windfall.”

The court also declined to impose a higher burden of proof on an employer asserting the “same decision” or “mixed-motive” defense. The employer need only show that it would have made the same decision even absent the discrimination under the traditional “preponderance of the evidence” standard. Additionally, the court observed that an employer who intends to assert the “same decision” or “mixed-motive” defense should raise the issue in its initial response to a lawsuit, although general language that the employer had non-discriminatory motives is sufficient. The court also noted that there would be no inconsistency for an employer to deny that it had a discriminatory motive altogether while also arguing, contingently, that if the trier of fact finds a mixture of lawful and unlawful motives, then the employer’s lawful motive alone would have led to its decision.

Mixed-Motive Defense Also Before U.S. Supreme Court

The mixed-motive defense is currently before the U.S. Supreme Court in Univ. Texas Southwestern Med. Ctr. v. Nassar. Certain federal anti-discrimination laws, such as Title VII’s retaliation provisions, do not specifically authorize mixed-motive claims. In Nassar, the U.S. Supreme Court will decide whether an employee claiming discrimination under these types of laws must prove that the employer would not have taken an adverse action but for an improper motive. This is called a “but-for” causation standard. Currently, there is a split among federal circuits as to whether employees must prove “but-for” causation or whether a less stringent standard applies, in which employees need only show that a discriminatory motive was one of several reasons behind an employer’s action.

In 2009, the U.S. Supreme Court determined that the “but-for” causation standard applies in cases brought under the federal Age Discrimination in Employment Act (“ADEA”). This means that an employer is not liable under the ADEA unless age discrimination was the “but-for” cause of an adverse employment decision. The California Supreme Court declined to apply the “but-for” causation standard in Harris, as many employers had hoped.

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Mixed Motive… from Page 6

The Upshot of Harris for Employers

Although the Harris decision was not a complete victory for employers, it raises the burden on employees to show that unlawful discrimination was a “substantial factor” motivating an adverse employment decision. And even if the employee meets this higher burden, Harris eliminates the risk that an employee will be awarded monetary damages, back pay, and reinstatement. The decision may deter the filing of lawsuits in mixed-motive cases, and reduce plaintiffs’ expectations when it comes to valuing a case for settlement purposes. If you have any questions about the content of this article, please contact the Pillsbury attorney with whom you regularly work, or the authors below.

Reprinted with permission from Pillsbury Laww. The authors can be reached as follows: Ellen Connelly Cohen, Los Angeles, 213.488.7313, [email protected], Paul m. Weber, San Francisco, 415.983-7488, [email protected]

Patient's Care, PHI (includes genetic information), Requested Disclosures to Third Parties, Requested Restrictions, Research, and Sale of PHI.

Covered entities should review and amend their Notices of Privacy Practices and HIPAA Policies and Procedures to incorporate both the new breach notification rule and to ensure compliance with all revised definitions and rules.

Application to Business Associates. Additionally, the new regulations extend HIPAA's application to Business Associates and any Business Associate Subcontractors. Business Associate Agreements should also be reviewed and amended to ensure compliance with the new regulations.

Next Steps:

You should review and update your HIPAA practices and policies, compliance manual, and Business Associate Agreements and provide updated training to your employees that access protected health information.

Reprinted with permission from FordHarrison. The authors can be reached at: Tiffany Downs, [email protected], Isabella Lee, [email protected], Scott Wagner, [email protected], or any member of FordHarrison's Employee Benefits Practice Group.

HIPPA… from Page 3

“That Can't Be Right!” California Appellate Court Rules that Piece Rate Workers Are Entitled to Separate Hourly Compensation

by Richard Rahm, Julie Dunne, and Michelle Heverly, Littler Mendelson

A California Court of Appeal dealt another blow to employers this month when it held automobile mechanics, who earned at least minimum wage for every hour worked, were entitled to separate hourly compensation for any time not spent performing auto repairs. See Gonzales v. Downtown LA Motors, LP, 2013 Cal. App. Unpub.

. LEXIS 1728 (March 6, 2013). The attorneys for Downtown LA Motors (DTLA) argued it "can't be right" to find that employers who guarantee their employees the minimum wage for every hour worked somehow failed to satisfy their minimum wage obligation. The appellate court disagreed, awarding the class in excess of $1.5M.

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Piece Rate… from Page 7

Background

Gonzalez claimed that DTLA's piece rate plan paid auto mechanics only for time they were actually making repairs, and not for any other time, such as time waiting for customers to arrive, obtaining parts, cleaning their work stations, attending meetings, traveling to other locations to pick up and return cars, reviewing service bulletins, and participating in online training. DTLA's mechanics were compensated based on a piece rate known as "flag hours," which pays a set number of hours for a particular repair, regardless of the actual time the mechanic takes to complete the repair. For example, a brake repair might have a "flag hour" allotment of 2 hours, and the mechanic performing the break repair would thus receive 2 hours' pay, even if the repair took more or less than 2 hours to complete. Further, DTLA guaranteed the mechanics the minimum wage for every hour worked (not just time spent making repairs).

Citing Armenta v. Osmose, Inc.,135 Cal. App. 4th 314 (2005), the Gonzalez trial court found DTLA's compensation plan constituted illegal "pay averaging," and that DTLA was required to pay a separate hourly rate for any time the mechanics were not actively engaged in repairs. DTLA appealed.

Deciding Whether Armenta Applies to Piece-Rate Compensation

The primary issue for the appellate court in Gonzalez was whether its previous decision in

Armenta applied to piece-rate compensation. Armenta concerned hourly employees who worked pursuant to a collective bargaining agreement where the employer paid only for "productive" hours, and did not pay for "nonproductive" work, such as travel from the office to a work site. The employees in Armenta sued for alleged failure to pay minimum wage. The employer argued that it satisfied California’s minimum wage requirement because, dividing the employees’ compensation by the total number of hours worked (both productive and nonproductive), the employees still "averaged" more than minimum wage for all hours worked. Citing to California Labor Code sections 221, 222 and 223 (none of which concern minimum wages), the Armenta court held that the employer could not satisfy minimum wage obligations by "averaging," but instead was required to pay minimum wage "for each hour worked."

DTLA argued that Armenta should not apply because its holding was specific to hourly employees who, the trial court found, were not paid minimum wage for all hours worked. The Gonzalez court disagreed, holding that Armenta did apply to piece-rate compensation. The appellate court first noted that the relevant wage order provides that an employer shall pay "not less than the applicable minimum wage for all hours worked in the payroll period," regardless of whether the "remuneration is measured by time, piece, commission, or otherwise." The Gonzalez court next referenced federal district court decisions that have rejected the argument that Armenta should be limited only to hourly employees, citing to Cardenas v. McLane Foodservices, Inc., 796 F. Supp. 2d 1246 (C.D. Cal. 2011) and Carillo v. Schneider Logistics, Inc., 823 F. Supp. 2d 1040 (C.D. Cal. 2011) (both cases holding that truck drivers who were paid on a piece-rate basis must be paid for all hours worked). The appellate court also found the application of Armenta to be consistent with the position and enforcement policies of the Division of Labor Standards Enforcement (DLSE).

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Piece Rate… from Page 8

The Gonzalez court thus held that, based on Armenta, DTLA’s piece-rate compensation failed to comply with California’s minimum wage statute because DTLA failed to compensate its mechanics for the time they spent waiting between repairs. The appellate court also clarified that its holding was limited to the facts before it, and that it was not making any ruling regarding how the same pay structure would apply in a commission setting.

The Gonzalez Court Misapplies California Minimum Wage Law

The flaw in the Gonzalez logic is that it disregards settled California minimum wage law, which requires only that employers pay employees at least minimum wage for every hour worked, regardless of the tasks performed. Indeed, Labor Code section 200 defines "wages" as "all amounts for labor performed by employees," regardless of whether paid by the hour or the piece, without any qualification that a piece-rate wage may be paid only when an employee is actively working on the "piece."

The only authority supporting a claim that piece-rate compensation may be paid only for time spent actively making "pieces" is section 47.7.1 of the Division of Labor Standards Enforcement Policy and Interpretations Manual. As a preliminary matter, the California Supreme Court has held that the DLSE Manual is not entitled to deference because it is an underground regulation. See Tidewater Marine Western, Inc. v. Bradshaw,14 Cal.4th 557, 576-77 (1996). However, even if the DLSE Manual is considered, the DLSE has repeatedly opined that a compensation plan that includes a guaranteed rate of compensation per hour that equals or exceeds minimum wage is lawful. See, e.g., section 34.2 of the DLSE Manual (a draw against commissions must be equal at least to minimum wage "for each pay period"); DLSE Op. Ltr. 1987.03.03 ("must be paid at least minimum wage for each period of employment").

Here, DTLA’s piece-rate plan guaranteed that employees would earn at least minimum wage for every hour worked regardless of whether they made any pieces at all. This type of pay plan is lawful, and the appellate court’s conclusions are erroneous, for several reasons. First, the pay structure is distinguishable from Armenta because DTLA guarantees its employees the minimum wage for every hour worked, leaving no work time uncompensated. Second, the hourly guarantee falls squarely within the parameters of section 34.2 of the DLSE Manual. Third, the guarantee ensures minimum employee compensation, while the piece-rate component of the pay plan allows and incentivizes employees to increase their compensation based on productivity. Fourth, the provision of the DLSE Manual that spawned this line of cases is factually inapplicable. It states that an employer may not pay piece rate during periods of time when the employer "precludes" an employee from earning a piece rate. DTLA did not preclude its mechanics from earning their piece rate during periods of down time. Customers simply were not present or in need of repairs. And in any event, DTLA accounted for such down time by guaranteeing that it would pay its employees minimum wage for every hour worked, regardless of whether the employees were "making pieces."

Richard Rahm and Michelle Heverly are Shareholders in Littler Mendelson's San Francisco office, and Julie Dunne is a Shareholder in the San Diego office. If you would like further information, please contact your Littler attorney at 1.888.Littler or [email protected],

Reprinted with permission from Littler Mendelson. The authors can be reached as follows: Mr. Rahm at [email protected], Ms. Heverly at [email protected], or Ms. Dunne at [email protected].

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Senate

SB 292: Adds to illegal harassment threats of sexual violence and specifies that an act is sexual harassment regardless of the sexual orientation, sexual desire, or intent of the harasser.

SB 390: Makes it a crime to fail to remit funds withheld from an employee's paycheck pursuant to state, federal or local law.

SB 400: Victims of Domestic Violence. Prohibits employers from taking action against employees who are the victims of domestic violence. Adds "stalking" to definition of domestic violence. Requires the employer to reasonable accommodate a victim of domestic violence who requests accommodation unless the accommodation would create an undue hardship on the employer. Specifies actions that are included in reasonable accommodation.

SB 404: "Familia Status" added as protected class under FEHA. Similar legislation has been introduced before."Familial status" means an individual who provides medical or supervisory care to a family member." Family member includes spouse, child, registered domestic partner, parent, parent-in-law, siblings, grandparents and grandchildren.

SB 462: Existing law allows a prevailing party, employee or employee to recover attorney fees in a court action for a wage and hour violation. This bill would condition the employers right to recover fees on the condition that the employees claim was made in "bad faith".

SB 607: Alternative Work Schedule: Allows an individual employee to select an AWS if the employer has 10 or fewer employees.

SB 770: Adds caring for grandparents, grandchildren, siblings and parent-in-law under the Paid Family Leave Act.

This is the first Legislative Update for 2013. The Assembly has introduced over 1400 bills and the Senate over 850. Many of the bills have been introduced before and either were vetoed or not passed by both houses of the Legislature. If you know of any bills that I missed please let me know. I will be sending out new updates approximately once a month.

You may download copies of these bills from www.leginfo.ca.gov, or contact me. If you need assistance let me know. Please do not rely on this report as legal advice, because it isn’t. If you need more detailed information, you should contact your local attorney, or give me a call.

Summary of Major Bills

Assembly

AB 155: Overturns a court decision and clarifies that an employee has the right to receive a copy of payroll records in accordance with LC 226.

AB 263: Prohibits anyone from using immigration status to retaliate against an employee for filing a Labor Commissioner complaint.

AB 442: Under current law the Labor Commissioner enforces claims that an employer paid less than minimum wage and may levy a penalty equal to twice the amount not paid. This bill would make payable to the employee an additional penalty of twice the amount not paid.

AB 556: DFEH: Would add military and veteran status to protected classes under the Fair Employment and Housing Act.

AB 1082: Declares that it is the intent of the Legislature to require employees to keep records of hours worked and whether employees receive health insurance. An actual bill will have to be written.

AB 1164: Liens for unpaid wages: Would allow any claimant to file a lien against an employer if denied wages.

2013 LEGISLATIVE UPDATE by Bruce Matlock, Esq.

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The Employer’s Cost-effective Approach to Business and Human Resource Solutions

EMPLOYER ADVISORY COUNCIL OF ORANGE COUNTY * INVITATION TO JOIN EAC-OC*

BENEFITS A hotline service for answers to employer-employee questions staffed by a labor/employment

attorney. Monthly frequently asked Q & A are posted on the EAC website “Members Only” A quarterly newsletter, the “Advisor”, plus emailed “Alerts” with current, pertinent information Member discount on workshop fees * $95 per person, discounted for members to $75 per person Forum to network with other professionals in the human resources field Website with current information, plus a “Members Only” section with more resources

PURPOSE Employer education and training on topics such as:

o Employment Trends o Labor Law o Legislation o Workers’ Compensation

To help employers stay in compliance with the law through the Management Hotline To act as advisors to the Employment Development Department and help promote

services they provide to the employer

MEMBERSHIP APPLICATION You may also sign up online at www.eacorangecounty.com

Company_______________________________________________________________________________

Contact Name_____________________________________Title__________________________________

Street _____________________________________________ City _______________ Zip _____________

Phone (_____)_______________Email: ____________________@ _______ Fax (____) _______________

Number of employees ______ Industry ________________________________# of years in business _____ Amt: $95.00 Method of payment __Check enclosed __MasterCard __ Visa Pleasse add up to three employees who would like to receive EAC information:

Name__________________________________________Email_____________________________________

Name__________________________________________Email_____________________________________

Name__________________________________________Email_____________________________________

To pay with MasterCard or Visa, please fill out the information below. You will receive a receipt via email.

Name on Card__________________________________ Card #_________________________________

Expiration date_______________ Billing Zip Code_________

Signature_________________________________________________________________________ Your Company is the Member. You may add up to three people from your company that you would like EAC to contact with meeting information. Please add their names, titles and emails to this application.

Complete this form and fax it to 714.844-4779 OR email to [email protected] OR just call the Association Office 714.846.2510. EAC OC accepts cash, check as well as Visa and MasterCard. EAC OC, 16033 Bolsa Chica Street #104-615, Huntington Beach, CA 92649. Dues are paid annually. If you are joining during the year, your next year’s dues will be pro-rated accordingly.

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2013 EAC OC CERTIFICATE PROGRAM WORKSHOPS REGISTRATION FORM

April is the last chance to register to receive the Certificate at yearend. Please contact the EAC office for more information-714-846-2510. Reservations without the yearend Certificate but still saving money by prepaying are available until June.

Five Certificate Workshops are offered in 2013 and held in two locations Certificate Workshops are held on the “even” months of February (2), April (4), June (6), August (8), October (10). These workshops are approved by the HRCI – Human Resource Certificate Institute. The workshops are also open for general attendance. Same speaker & presentation, two locations, two different dates for the Certificate Workshops: Embassy Suites in Garden Grove on the third Thursday of the month Mission Viejo Country Club in Mission Viejo on the fourth Thursday of the month Four General Workshops are offered in 2013 in one location General Workshops are held on the “odd” months of January (1), March (3), September (9), November (11). The location for general workshops is: Embassy Suites in Garden Grove on the third Thursday of the month Special May 2013 Conference The CEAC – California Employer Advisory Council – will be holding their Annual Conference in Southern California on May 9th. Watch for more information! “Breakfast Briefings” EAC will schedule special briefing workshops as needed during the year.

REGISTRATION - PAYMENT INFORMATION

COMPANY NAME _______________________________________________________ Please use the form attached – one form for each person in your company. Use this page to pay for the registrations. We are registering the following employees: _______________________________________ __________________________________________ _______________________________________ __________________________________________ To take advantage of the Certificate Program you must choose a minimum of five workshops per person, either Certificate or General workshop. Additional workshops can be added per person. Member Price – per person $65 per workshop x _______ workshops selected x _____ number of people attending = $__________ Non Member Price – per person $85 per workshop x _______ workshops selected x _____ number of people attending = $__________ Payment choices ____ Mail check to EAC, 16033 Bolsa Chica #104-615, Huntington Beach, CA 92649 Please fax registration form(s) to 714-844-4779 or email to [email protected] while your check is in process ____ Fax registration form(s) to 714-844-4779 with Visa or MasterCard information Card # _______________________________ Exp ______ Billing Zip __________ Name on Card ________________________ Authorized signature ______________________________ ____ Send an invoice to the company. What is contact name to receive this invoice? ______________________

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2013 CERTIFICATE PROGRAM REGISTRATION FORM Please use one form for each person registering

Company _______________________________________________________________

Name of Person __________________________________________________________

Contact Phone __________________ Email address ___________________________

I will be attending the workshops at:

___ Embassy Suites Garden Grove OR ___ Mission Viejo Country Club in Mission Viejo

You can change the location of the workshop with just a phone call to the EAC office no later than

four days prior to the first workshop date of a specific month.

HRCI (Human Resource Certificate Institute) approves the five Certificate Workshops in 2013

for 2.75 credit hours. If you would like to receive a Certificate for each workshop you attend please

check here ___ Yes

Certificates from EAC - EAC Certificate of Completion at the end of the year if you attend all or at

least four out of the five designated Certificate workshops. EAC Certificate for EACH certificate

workshop that you attend if you checked “yes” above for HRCI. EAC Certificate of Participation if

you attended any five or more of a combination of General and Certificate workshops.

Cost: Members $65 per workshop (regularly $75) per person x 5 workshops – you must prepay

$325 with this application. Non Members - $85 per workshop (regularly $95) per person. x 5

workshops – you must prepay $425 with this application. You can also sign up for the general

workshops at the same prepaid price. Just check the workshops you would like to attend below.

April is the last chance to register to receive the Certificate at yearend. Please contact the

EAC office for more information.

New Laws

General Workshop Garden Grove

January 17

Documents, Documents, Documents

Certificate Workshop Garden Grove

February 21

Certificate Workshop Mission Viejo

February 28

Safety Planning & Implementation

General Workshop Garden Grove

March 21

Workplace Investigations

Certificate Workshop Garden Grove

April 18

Certificate Workshop Mission Viejo

April 25

Self Audits

Certificate Workshop Garden Grove

June 20

Certificate Workshop Mission Viejo

June 27

Workers’ Compensation

Certificate Workshop Garden Grove

August 15

Certificate Workshop Mission Viejo

August 22

Updates & Information on UI & DI

General Workshop Garden Grove

September 19

What is Reasonable Accommodations?

Certificate Workshop Garden Grove

October 17

Certificate Workshop Mission Viejo

October 24

Hot News from the HR Hotline

General Workshop Garden Grove

November 21

You can sign up for more than 5 workshops at the

same prepaid price or any combination of 5 or more

general and certificate workshops.

Minimum number of workshops per person to take

advantage of the discounted price is 5 workshops.

____Total number of workshops selected

Please send with payment information page.

Questions??? Please email the EAC office at

[email protected]

or call 714-846-2510.

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This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering legal or other professional service. If legal advice or expert assistance is required, the service of a competent professional person should be sought.

OFFICE ADDRESS PHONE Anaheim Job Service ....................................... 2450 E. Lincoln Ave. ............................................ 714-518-2315 ......................................................................... Anaheim, CA 92806 Anaheim Workforce Center .............................. 50 S. Anaheim Blvd. ........................................... 714-765-4350 ........................................................................ . Anaheim, CA 92805 Irvine One-Stop Center .................................... 125 Technology Drive #200 ................................ 949-341-8000 ........................................................................ . Irvine, CA 92618 Westminster One-Stop Center ......................... 5405 Garden Grove Blvd. ................................... 714-241-4900 ........................................................................ .Westminster, CA 92863 Santa Ana W.O.R.K. Center ............................. 1000 E. Santa Ana Blvd., Ste. 220 ........................ 714-565-2610 ......................................................................... Santa Ana, CA 92701 (At the train station) Santa Ana Disability Insurance ........................P.O. Box 1466 ........................................................ 800-480-3287 ......................................................................... Santa Ana, CA 92701 Employment Tax Audit Area Office ................ 2099 So St College Blvd., Ste. 401 ....................... 714-935-2920 Anaheim, CA 92816-6014 EDD Labor Market Information ........................South County ...................................................... 949-341-8051 ......................................................................... North County ..................................................... 714-687-4816

EMPLOYMENT DEVELOPMENT DEPARTMENT (EDD) Orange County Locations

The relationship between the California Employment Development Department (EDD) and the Employer Advisory Council (EAC) is defined as a partnership. “The partnership’s commitment to both the employer and the worker is to improve EDD services, increase cooperation and communication among EDD and the private sector, and to increase employer’s knowledge of EDD programs and services.”

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