Labor & Employment Law Blog

On September 24, 2019, the U.S. Department of Labor announced a final rule modifying the earnings thresholds necessary to exempt executive, administrative and professional employees from the Fair Labor Standards Act’s (FLSA) minimum wage and overtime pay requirements. The rule also allows employers to count a portion of certain bonuses/commissions towards meeting the salary level. The thresholds were last updated in 2004, though the DOL briefly adopted more significant changes—which never took effect—in 2015.

On May 29, Assembly Bill (AB) 5 passed the California State Assembly, moving Californians one step closer to full implementation of a new test for independent contractor classification. AB5, which was introduced by Assemblywoman Lorena Gonzalez of San Diego, seeks to codify the California Supreme Court’s April 2018 Dynamex decision, which established the “ABC test” to determine classification of workers as employees or independent contractors.

Since its introduction in December 2018, AB5 has undergone several revisions.  Most significantly, the bill would confirm that the ABC test will be used in making worker classification decisions under California’s Wage Orders, Labor Code, and Unemployment Insurance Code.  Also important is a set of carve-outs that appeared in the most recent iteration of the bill: the ABC test would not apply to doctors, dentists, lawyers, architects, accountants, engineers, insurance agents, investment advisers, direct sellers, real estate agents, hairstylists and barbers renting booths at salons, some marketers, and human resources professionals. 

The California Chamber of Commerce and the “I’m Independent” Coalition are seeking to make additional exemptions to AB5, including carve-outs for short-term projects, business-to-business contracts, and others.

AB5 will now move to the Senate, where it will be heard in Senate Labor Committee in late June 2019.

Guidance for Employers

Though AB5 has not yet been passed into law, California businesses using independent contractors should consult with employment counsel concerning classification of contractors under the Dynamex ABC test.  The authors of this article welcome any questions on the legislation or the ABC test, and are following developments in the law closely. 

For more information and updates about Dynamex and its implications, employers can read our prior Alert on Dynamex here and register for the Firm’s complimentary webinar on this topic here.

On January 1, 2018, the California Legislature enacted the New Parent Leave Act (“NPLA”). The NPLA expanded baby-bonding benefits to employees of smaller employers (20-49 employees), a benefit that had been previously available only to employees of larger employers (50 or more employees) under the California Family Rights Act (“CFRA”).

New Posting Requirement

Along with this expansion comes a new poster that discusses the NPLA, CFRA, and Pregnancy Disability Leave:

www.dfeh.ca.gov/wp-content/uploads/sites/32/2017/06/CFRA_PregnancyLeave_English.pdf 

All employers with 20 or more employees must display the poster.  The Department of Fair Employment and Housing (“DFEH”) requires that the posters be placed where they can be easily seen by employees and applicants for employment.

In addition, if 10% or more of the employer’s workforce at any given location speaks a language other than English, the employer is required to post the notice in such other languages.  The DFEH published several translated versions of the poster at its website:

www.dfeh.ca.gov/resources/posters-and-brochures-and-fact-sheets/poster-and-brochure-tab-list/?target=posters

An employer must also incorporate a description of the NPLA in the next version of its employee handbook.

As an alternative to displaying multiple government-issued posters, some employers prefer to purchase and display an “all-in-one” poster from various sources.  Employers should review the posters to ensure they are up to date.

Medical Certification Form

The DFEH also recently updated the form that addresses the certification of a health care provider for leaves under the CFRA and the Family and Medical Leave Act (“FMLA”):

www.dfeh.ca.gov/wp-content/uploads/sites/32/2017/12/CFRA-Certification-Health-Care-Provider_ENG.pdf

Please contact the authors or your usual employment law counsel at AALRR if you have any questions regarding the DFEH, NPLA, CFRA, or other posting requirements.

California announced the debut of its CalSavers program this month, designed to help employees save for retirement when their employers are not able to offer participation in another retirement program.

California’s Fourth Appellate District, Division One, recently upheld a trial court judgment in favor of Certified Tire and Service Centers (“Certified Tire”), finding the company’s compensation system for its tire technicians complied with California’s wage and hour laws.

On July 18, 2018, the Ninth Circuit Court of Appeals threw out a proposed class action lawsuit alleging that Taco Bell had violated California’s meal period and overtime requirements by requiring employees who purchased discounted meals to stay on the premises during their meal period.  The Court held that Taco Bell did not violate California law and affirmed an order granting summary judgment in favor of Taco Bell in a proposed class action suit titled Rodriquez v. Taco Bell Corp. (9th Cir. Case No. 16-15465).