Unpaid Leave can Lead to a Lawsuit – Coronavirus Update

unpaid leaveUnpaid leave due to the COVID-19 pandemic is being forced on more Americans than at any other time in our country’s history. As of April 1 of this year, Public Law 116-127, otherwise known as the Families First Coronavirus Response Act, gives workers the right to sue their employers in the event proper leave is not provided. Businesses employing between 50-500 workers must comply with the new law.

Consider These Unpaid Leave Circumstances

Many individuals across California and the United States are not showing up for work for reasons beyond their control:

  • There is a state or local quarantine;
  • They have received notification that they should self-quarantine due to a possible exposure or symptoms of the disease;
  • They have experienced disease symptoms and are seeking medical testing or treatment.

Under these circumstances, workers are entitled to the greater of these three wages:

  • Your regular pay;
  • The federal minimum wage;
  • The state minimum wage.

You can top out at as much as $511 per day during the course of your sick leave.

Furthermore, you may be entitled to two thirds of your normal pay — up to $200 daily — if you are unable to work for the following reasons:

  • You are caring for an individual who must be isolated or quarantined;
  • You are caring for a child who is unable to attend schools due to local closures;
  • You are in another situation similar to these that prevents you from going to work.

How it Works

Sick leave and expanded family and medical leave is calculated as follows:

Part time workers are entitled to the average earnings in a two-week time frame. The average going back six months may be used if an employee’s schedule varies significantly from week to week. These workers are entitled to paid sick leave for two weeks, and may extend the payment period for as many as 10 more weeks under the expanded family and medical leave provisions. In the event employees generally put in overtime hours, those too must be compensated under the Emergency Family and Medical Leave Expansion Act. Under the Emergency Paid Sick Leave Act, however, only hours up to 80 in a two-week period are to be paid. [Read more…]

Coronavirus Lockdown Orders Impacts Businesses: Banks Offer Relief

coronavirus lockdown ordersCoronavirus lockdown orders have permeated the country creating dire consequences for employers and employees. Coronavirus has led to social distancing measures to protect communities, but the collateral damage on businesses, particularly small businesses, is proving to be devastating. Enter the banking industry. 

Coronavirus Lockdown Orders – Essential vs. Nonessential Businesses

California’s Governor Newsom issued executive coronavirus lockdown orders in March requiring residents to stay home unless they were needed to maintain “essential infrastructure.” That means a number of businesses have been shuttered, and employees left wondering how they will pay their bills. The businesses considered essential, to date, include grocery stores, pharmacies, banks, laundromats, law enforcement, fire and EMT, gas stations, and, of course, medical services. Some manufacturers and distributors, particularly those involved with the medical field, are also remaining in business. Likewise, employees who assist vulnerable populations in areas such as food and shelter operations may continue to work, as well as those dealing with child abuse and elderly care. Public works and communications employees are still going to work, and electricians, plumbers, and sanitation workers continue to support the community. Additionally, veterinary services are still available to the public. Finally, those working in mortuary, funeral, and cemetery services are deemed essential.  That leaves entertainment venues, salons, fitness centers and more with no way to make money. Those in transportation, and hospitality industries have limited employment. Indoor dining is prohibited, so restaurants can earn a marginal income through take-out and delivery orders.

State Options for Your Business 

The governor has worked with both national banks and state-chartered ones, along with credit unions, to create a grace period on loan payments in the wake of the COVID-19 outbreak prompted coronavirus lockdown orders. Additional programs centered around payment deferrals, fee waivers, interest rate adjustments, and various loan modifications are available to assist business owners who have been negatively impacted by the pandemic.

Federal Assistance

The federal government has enacted legislation to address financial assistance for small businesses that have been hit by the virus. Organizations with 500 or less on the payroll may obtain loans from the Small Business Administration to help with business expenditures. This may include the following:

  • Payroll and compensation;
  • Healthcare costs;
  • Mortgage and other interest obligations;
  • Rent and utilities.

These loans are provided with no collateral or personal guarantees, and costs associated with employee payroll will be forgiven up to $100,000. The remainder of the loan will carry no more than 4% interest. [Read more…]

McDonald’s Lawsuit Ends With $26 Million Settlement

mcdonald's lawsuitAfter years of legal wrangling, a McDonald’s lawsuit was settled in November of 2019. This McDonald’s Class action lawsuit was first filed back in 2013. In this McDonald’s class-action lawsuit, workers claimed that the employer had wrongfully underpaid cashiers and cooks in California. It is yet another prime example of a big corporation that was brought to heel by the courts after engaging in unfair business practices. If you feel your employer may be bending the law at your expense, seeking the help of a local labor attorney may be a good move.

The McDonald’s Lawsuit

McDonald’s employees had several specific claims against the fast food giant:

  • Workers’ shifts were structured so as to deny overtime pay to employees.  The company claimed that if a shift was split up within a 24-hour period, the worker was ineligible for overtime.  So if an employee worked from 9 pm. to 3 a.m. on one shift, and worked from 3 p.m. to 9 p.m. in a successive shift, McDonalds refused to pay overtime despite 12 hours of work in a 24-hour period.
  • Breaks were allowed only at the beginnings and ends of shifts, not in the middle when business picked up and when workers could use the rest;
  • Employee uniforms were required to be cleaned and ironed, but employees were not given compensation for their care, particularly when clothing was damaged due to grease and smoke in the workplace.

Seven years of this McDonald’s lawsuit negotiations finally resulted in a truce of sorts.  A settlement, which must still be approved by a judge, serves to both address past employee complaints and ensure compliance to the law in the future.  The agreement has a number of requirements for the corporation:

  • McDonalds’ must pay overtime, and have an electronic tracking system for breaks and wages;
  • Rest breaks must be provided during workers’ shifts, not just at the beginning or end; the company agreed to fork over a one-hour wage premium in the event a meal or rest break is interrupted and employees are asked to work.
  • The employer must replace uniforms following normal wear and tear or damage from the work site.

Although McDonald’s admitted no wrongdoing, nearly 40,000 California employees are reaping the benefits of the $26 million settlement, along with coming changes to daily practice.

The company issued a statement that claims they believed employment practices always complied with labor laws in the state.  Nonetheless, it is working to improve training programs for restaurants owned by the company in an effort to encourage strict compliance with legal requirements. [Read more…]

Coronavirus Layoffs

coronavirus layoffsCoronavirus layoffs have hit employees hard. Unfortunately, things look to get worse economically before we turn the corner on this crisis. When employers consider cost-cutting measures, one of the first things they look at is layoffs.  Before making a hard and fast decision on the topic of coronavirus layoffs, there are some important issues employers need to consider. 

Layoff Issues to Consider

First of all, employers need to take a look at how serious the fiscal hit to business is, and take an educated guess regarding how long the financial crisis will last. One key thing employers need to weigh is the difficulties they may face in replacing laid off workers when things turn around and business picks up. This becomes more of a challenge when the skills of workers are more refined and specialized. 

Who Has Been Hit?

Among the hardest hit by coronavirus layoffs are industries whose existence rely on people interacting. Clearly, social distancing gets in the way of those in the hospitality industry. That includes hotels, travel, restaurants, and entertainment, among others, and their bottom lines have been dramatically impacted since the advent of coronavirus. In this situation, the majority of employees do not have unique skill sets or specialized training. Although ramping up the workforce will take some effort when the time is right, finding qualified workers, even in a tight market, will likely not be a significant challenge. Layoffs in these fields, therefore, may not result in critical deficiencies when the economy turns around.

Businesses focused on manufacturing or advertising are generally impacted by any recession, as are those involved in freight and delivery. The current coronavirus layoffs crisis is no exception. Although eliminating these positions will save a company money, recognizing that these are skilled workers means that replacing them in an upturn will put you in competition with others for the best workers. It may be better for employers to look at simply reducing workers’ hours and letting workers’ compensation supplement their income during this downturn.

Alternatives to Coronavirus Layoffs

When tough times hit any business, employers are wise to communicate clearly the concerns of the company and keep employees in the loop as plans are being made. Having clear goals and expressing them openly will benefit everyone involved. In order to avoid layoffs, there are strategies that might be considered to get the business through the rough patch:

  • Sharing the pain: If everyone in the company cuts back, from the janitorial staff to the CEO, it may be possible to limp along for a significant period of time. That way the business can stay intact, and be 100% ready to go when things turn around.
  • Crowdsource ideas: If you open the discussion to workers, a variety of money-saving solutions may evolve as employees buy-in to the notion of saving the business.

[Read more…]

Coronavirus Pandemic Shuts Down Commerce

coronavirus pandemicIf you are a worker who is concerned about making ends meet in the era of the coronavirus pandemic, you are not alone. Nearly 7 million Californians do not have enough money on hand to pay for basic necessities. So, when income is cut off, it puts people in dire straits. 

The Coronavirus Pandemic Cripples the Economy

In just a matter or weeks, once thriving businesses have had to shutter, and entire sectors have closed down. Workers of all stripes are wondering how they will be able to afford food and other necessities, and where the money for their next rent payment will be coming from. And indicators like colossal drops in the stock market, federal reserve municipal bond purchases, and a drop in Treasury yields tell us the financial decline is going to stick around for a while.  Estimates are that jobless claims will skyrocket to 2 million in the coming days and weeks, putting many across the nation in difficult situations.

Who is Primarily at Risk?

Hourly employees generally are at greatest risk of layoffs and losing their jobs, particularly those in the service industry. We have seen employees in hotels and restaurants hit hard by the coronavirus pandemic. Those in manufacturing and retail are finding themselves in the same boat. Often, these workers do not have paid leave or other benefits to help.

Government Pandemic Plan 

The federal government has passed a coronavirus pandemic prompted plan to send Americans cash in the coming weeks. The stimulus package included payments of up to $1,200 to US taxpayers but not everyone will get the entire amount and others, not at all. Federally funded emergency leave has been passed and here in California, the governor also extended the eligibility period for Medi-Cal, welfare, and food stamps by three months.  

For families who have mortgages that are federally backed, evictions and foreclosures have been suspended until May. Governor Newsom also issued an executive order to allow local governments to ban commercial and residential evictions. 

Voluntary Assistance

California’s largest power utilities have voluntarily agreed to protect customers from phone, water, and power shutoffs. Comcast is giving new customers 60 days of free Internet.

Unemployment 

For workers who have had hours cut, unemployment benefits may be available.  Those who have contracted the coronavirus may qualify for disability benefits.

Food

The federal coronavirus pandemic relief is designed to assist mothers and pregnant women, as well as seniors, with funds for groceries and/or home delivered meals. Previously planned cuts to food stamp programs have been halted by a federal judge, allowing able-bodied but unemployed individuals to continue to collect benefits.  In the works during the coronavirus pandemic are plans for bolstered food banks, as well. [Read more…]

Coronavirus and Employment Discrimination

coronavirus and employment discriminationCoronavirus related anxiety is palpable. The worldwide growth of those infected and those that have died from the virus has been exponential. With travel bans and World Health Organization alarms ringing, it is natural that fears related to the virus and its symptoms abound.  But when those fears become outright cases of xenophobia, it is a real problem. If your workplace no longer feels safe because of prejudice and unfounded fears directed toward people of Asian descent, it is an issue that may require the assistance of a local employment attorney. 

Common Maybe, but Not Normal

The University of California Berkeley Health Services made a serious mistake when they sent out an Instagram post to students telling them that bias and bigotry are normal and common when facing the coronavirus. The university surely realized as much, leading to their quick deletion of the post. The fact is, while it may be true that many Americans experience bias and bigotry, it is not normal, and is certainly not acceptable. The unfortunate truth is, Western culture sometimes reverts to unreasonable xenophobia when faced with such issues, and it is not a pretty sight. 

A Comparison of Health Issues

The flu season this year in the United States has resulted in 19 million ill individuals, 180,000 people being hospitalized, and 10,000 fatalities. Yes, the coronavirus has deadly potential and it is important to have some perspective when considering the potential issues related to coronavirus.

Workplace Issues

What is an employer to do?  There certainly is a real issue confronting us; an epidemic apparently originating in Wuhan, China, is wreaking havoc worldwide. Actions have been taken to shut down non essential businesses, limit travel and shelter in place. Confirmed coronavirus cases continue to mount here in America. Employers of essential businesses have a responsibility to keep the workplace safe even in the face of a frightening epidemic. Common sense practices like regular hand-washing are appropriate. Here is what is not:

  • Just because an employee is of Asian descent, it does not mean they are carriers of the coronavirus. If your employee has not been to China in recent weeks, there is no need to treat them any differently than any other employee. Ostracizing such employees by word or deed is both improper and illegal. That is true for all employees, regardless of nationality.
  • Allowing employee gossip to flourish can be extremely damaging to employee morale and performance. If an employer is aware of unfounded rumors related to Asian-American employees and coronavirus, those rumors must be dealt with promptly. Failure to do so could result in legal action.

[Read more…]

Layoff vs Furlough – Employer Guidelines in a COVID-19 World

layoffLayoff or Furlough? As California enters this unprecedented time with Mandatory “Shelter In Place” orders throughout California, many employers are facing the imminent decision to reduce workforce while we all face uncertainty over when normal business with resume.  Many employers are unable to assign work to their employees at home and must consider greatly reducing their current workforce as soon as possible.

Employers reducing scheduling for non-exempt hourly employees with a reduced work schedule or not at all generally do not have to worry about liability for the reduction.  However, a common question is what to do with employees and whether employees should be laid off or furloughed during this time.

Layoff vs. Furlough

A layoff can be temporary or permanent.  It is recommended that layoffs occurring during this recent pandemic are temporary due to the unknown duration of the reduction of workforce.  When laying off an employee, the employer must follow all California Labor Laws and the Worker Adjustment Retraining and Notification Act (WARN) with no expectation the employee will return to work in the future.

A layoff is a separation of the employment relationship and the rehire process must occur for the employee to rejoin the workforce.  All benefits are terminated at the end of the term of the separation and the employee will no longer be employed by the employer.

A furlough occurs when the employer is reducing the days or weeks an employee may perform work.  An employer will suspend the work of most or all employees and send them home without pay.  This is a mandatory suspension from work that can last briefly or as long as the employer desires.  It typically occurs when the employer wants to retain staff that they cannot afford.  Furloughed employees also retain their benefits with the Company and retain their employment relationship with the employer.

Employees are generally furloughed when there is a reduction in workforce but the reduction is temporary and employees are expected to return to work on a certain date or a specific condition.

If an employee performs any work for the employer during the furlough, an exempt employee is entitled to an entire week’s pay and a non-exempt employee is entitled to payment for any time worked.  Employee work includes checking e-mails, making phone calls, or performing any task for the employer.  A “workweek” in California is defined as 7 consecutive days, starting with the same calendar day each week.  The workweek can begin on any day and any hour.  However, if an employer has no properly established workweek, the Division of Labor Standards Enforcement (DSLE) assumes the workweek is from Sunday through Saturday.

It is highly recommended that employers revoke all access for employees during the furlough and send notices of the change in employment status outlining the employer’s furlough procedures and policies.

The main difference between a furlough or laying off employees is that furloughed employees can come and go fairly easily but layoffs require the employer comply with all relevant Labor Laws, the federal and California WARN Act, and possibly conduct the rehiring process to reinstate the employees.  Furloughed employees also retain their benefits and employment status with the employer while a lay off is the end of the employment relationship.

Work Adjustment Retraining Notification (WARN)

When an employer decides to layoff its workforce, it is important to comply with the Worker Adjustment Retraining Notification Act (WARN) both federally and within California.

Federal WARN

Compliance with Federal WARN laws is triggered when there are temporary layoffs longer than 6 months and the layoffs include 50+ employees in a 90 day period.  Notice may be shortened if circumstances were not reasonably anticipated 60 days before the employee was laid off.  However, actual notice must be given is a much advanced time as possible.

California WARN

The similar California WARN laws provides no exception for the 60 day notice rule and it has not yet been determined if COVID-19 would be an exception to the notice requirements.  However, on March 17, 2020, Governor Newsom signed Executive Order N-31-20 relieving employers of some on these requirements.

Executive Order N-31-20 explains “the need to prevent or mitigate the spread of COVID-19” has caused employers to “close rapidly without providing their employees the advanced notice required under California Law.  Therefore, Labor Code sections 1401(a), 1402, and 1403 are suspended for the employer at this time.

This order will be in effect for the duration of the COVID-19 “emergency” and provides notice still must be given but amends the 60 day requirement to “as soon as practicable.”  The following is required by all California employers engaging in layoffs during this time:

  1. The employer must still give written notice to the employee under the WARN Act;
  2. The employer must give as much notice as practicable including a brief statement explaining why the notice is reduced;
  3. The notice must explain that COVID-19 was not reasonably foreseeable that the time notice would have been required; and
  4. The notice must include “If you have lots your job or been temporarily laid off, you may be eligible for Unemployment Insurance (UI). More information on UI and other resources available for employees is available at labor.ca.gov/coronavirus2019

It is anticipated further guidance will be given to employers in the upcoming week by the Employment Development Department (EDD).

Other Resources

While employers are faced with difficult decisions there are resources available for both employers and employees.

All employers have the option the offer paid Sick Leave and use of Paid Time Off to their employees during any temporary closure but cannot require the employee use Sick Time.

All employees with changes in their current employment status should check the EDD regarding possible unemployment compensation.  Employers should advise their employees that more information is available at labor.ca.gov/coronavirus2019 for possible resources during this emergency.

Employers may also avoid potential layoffs by participating in Unemployment Insurance Work Sharing Program if the employer will reduce wages and hours no more than 60%.  This allows for a quick adjustment when the business improves.

If your business is closing or you will be laying off your entire staff, you may be able to utilize the EDD’s Rapid Response Services.

If you are an “Essential Business” with an exception to the Shelter In Place Order and will be staying open during this time, you may consider possible waivers of liability and informed consent.  A list of “Essential Business” can be found here.
[Read more…]

Huge California Sexual Harassment Verdict

Sexual harassment verdict2019 was not a good year for Alki David, owner of Alki David Productions and FilmOn. The year wrapped up with David being plastered with a nearly $9 million workplace sexual harassment verdict. The jury punctuated their sexual harassment verdict with an award for damages totaling an additional $50 million. 

The Gist of the Case

Mahim Khan claimed she was subjected to David’s groping, moaning, dropping his pants, and other examples of sexual harassment. The jury found that the behaviors, which occurred repeatedly over an extended period of time, were perpetrated with malice. That led to the punitive damages, and a finding that David’s companies fostered a hostile work environment.  David’s own attorney described him as “…loud, arrogant, and obnoxious.”  

David’s History of Sexual Harassment Shows He Does Not Learn

Khan was not the first to take David to court for his improper behaviors in the workplace:

  • Lauren Reeves was awarded over $5 million in damages following a sexual harassment case against him;
  • Chastity Jones was awarded roughly $11 million in her case against David.

How to Respond if You Experience Sexual Harassment at Work

Sexual harassment occurs every day in this country and across the globe. As a sexual harassment victim, you have the law behind you in these situations. Your best bet is to hire a reputable  sexual harassment attorney right away.  There are a number of steps you can take to ensure justice prevails. For starters:

  • Look at the guidance in your employee handbook, and follow any procedures outlined there;
  • Make a formal complaint to the human resources department in writing;
  • Keep detailed notes of what occurs, including who was present, what was said and done, and when and where incidents took place;
  • Speak to a direct supervisor about the issue and ask for protection from the abuser during the investigation process;
  • Seek support from friends, family, or co-workers if you feel comfortable doing so;
  • Consider filing a complaint with the EEOC if you believe discrimination is a factor in the harassment.
If Reporting Sexual Harassment Results in Retaliation

In the event an employer chooses to retaliate against you for coming forward, you still have the law on your side.  Retaliation may be in the form of job reassignments, exclusion from training or other opportunities, or outright degradation and shaming. These and other reactions to sexual harassment are not legal, and they are not to be tolerated.   [Read more…]

Strippers $3.65M Lawsuit Settlement

Strippers Federal Lawsuit SettlementIn an industry fraught with unscrupulous club owners, the financial plight of strippers has gone largely unnoticed by the legal system. That is, until AB5 gave strippers a leg up on the issue. 

Disparities in the Industry

In a general sense, strippers go to work, take the deal club owners offer, and make it out of there with as much cash as possible. Unfortunately, the amount they wind up with can be pretty paltry.  More often than not, strippers work strictly for tips, which they are often required to share with bartenders, wait staff, house moms, managers, and DJs. In addition to that, dancers fork over a variety of fees to club owners, including stage fees, dance fees, or other house fees. Sometimes, fees are based on the degree of nudity achieved by the end of a performer’s act. Naturally, the dancers are considered independent contractors, meaning they are ineligible for sick leave, workers’ compensation, insurance, and other benefits. Overall, the finances of the business seem pretty shady in many cases.  

Strippers Lawsuit Emerges

A class action lawsuit was filed against Spearmint Rhino strip clubs claiming that dancers were being misclassified as independent contractors. The suit alleged that the law was being violated because strippers were not being paid minimum wage, and they were not even allowed to keep a significant portion of their tips. They were also responsible for purchasing their own wardrobes. Finally, dancers were never provided legally required wage statements.

The Settlement

Although the suit was brought in 2017 before AB5 was on the books, the plaintiff clearly saw the writing on the wall, and agreed to a settlement of $3.65 million. Here is how it was broken down:

  • $10,000 to be divided between the four strippers who brought the original suit;
  • $75,000 to the state’s Labor and Workforce Development Agency;
  • Just over $900,000 for attorney’s fees;
  • $2.6 million to be divided among all eligible class members who submit a claim.

In addition to the strippers financial payout, dancers have been reclassified as employees.

Tensions Over AB5

Despite the influence of AB5 in this case, there are many in the exotic dancing field who see the other side of the coin. They prefer the flexibility of being independent contractors and like choosing multiple clubs on the schedule that is convenient to them. Giving up their independence and having to be under the control of an employer is the last thing they want, and they said as much in a protest in front of Los Angeles City Hall [Read more…]

Commute Time Compensation?

commute time compensationCommute time compensation? Most people who work spend a fair amount of time commuting to the job site. Furthermore, many jobs require workers to commute as part of the job. With such variety in the expectations and commuting requirements for various occupations, how can you know whether or not your employer is treating you fairly when it comes to commute time? Actually, the courts have come up with some pretty clear guidelines on this topic.   

Commuting in a Company Vehicle

Installation and repair crews for Pacific Bell Telephone Company believed they should be paid for their commute time to and from home because they were driving vehicles that were provided by Pacific Bell, and those vehicles were equipped with the tools and equipment necessary to address customer needs. They decided to pursue the issue in court.  

Details of the Commute Time Case

Technicians were paid hourly for an eight-hour day to address customer issues at customer’s homes. While driving the prescribed vehicle and using company tools was required, employees had a couple of choices when it came to those vehicles:

  • Technicians could take the company vehicle to and from their own homes. This option was known as the Home Dispatch Program (HDP). Technicians received no pay for their commute time driving to a customer’s home prior to 8:00, and they were not compensated for the time spent driving home after their last appointment.
  • Employees could drive their personal vehicles to the Pacific Bell garage to exchange it for a Pacific Bell vehicle. These employees were paid for their time spent going to the garage in the morning, and from the garage home at the end of a shift.

In either case, employees were compensated for the commute time driving to and from the warehouse when they needed to restock materials for the job.

Court Findings

The California Supreme Court defined hours worked as those hours during which an employer maintains control of an employee. The issue of employer control was central to their findings, and was directly correlated to whether or not riding in employee-provided transportation was required. The court referred to Morillion v Royal Packing Co., which dealt with a similar issue. In that case, workers were required to meet at a particular place in order to take the company bus to the worksite. Employees were under the control of their employers at that point because they could not make the decision to stop at a drive-through window for coffee, could not pick up or drop off kids on the way, and could not run other errands while on the bus. Therefore, the commute time on the bus counted as hours worked.  

In the case of the Pacific Bell Workers, employees were not required to drive a company vehicle to and from home. Additionally, they were free to make stops during their commute time in the company vehicle, meaning the worker was not under the control of the company. Therefore the commute time spent under the HDP plan was not compensable. [Read more…]

Disclaimer

The information on this website should not be considered to be legal advice, nor construed to be the formation of any manner of attorney client relationship. Prior to taking any form of legal action, please consult with an attorney experienced in the appropriate area of law germane to your situation. Case results and testimonials presented on www.californialaborandemploymentlaw.net or any of its related websites are germane to the facts present for each individual case and is not a promise of similar outcomes for any other cases. This website is not intended to solicit clients for matters outside of the State of California.