Yearly Archives

New Guideline for Your Harassment Training

Do you know just what your harassment training programs should include? All employers should review their training programs now in order to ensure compliance with new guidelines issued by the California Fair Employment and Housing Commission (FEHC). The FEHC is the agency charged with enforcement of the harassment training law. (See http://www.fehc.ca.gov/pub/harassment training.asp)

Who Must Comply?
Pursuant to California Government Code Section 12950.1, employers with 50 or more employees or contractors are required to provide all supervisory employees with at least two hours of classroom or other effective interactive training and education regarding the prevention of sexual harassment. The 50 employee requirement “means employing or engaging fifty or more employees or contractors for each working day in any twenty consecutive weeks” in the present calendar year. The law does not require that the 50 employees work at the same location or all work or reside in California.

What Are The Specific Training Objectives?
The guidelines set forth content objectives for training both “to assist California employers in changing or modifying workplace behaviors that create or contribute to ‘sexual harassment’” as defined by federal and California law, and “to develop, foster and encourage a set of values in supervisory employees” who undergo such training “that will assist them in preventing and effectively responding to incidents of sexual harassment.” In addition to laying out the general content objectives for mandated harassment training, the guidelines also address “e-learning” and “webinar” training, which may prove to be convenient alternatives to the traditional classroom training.

What Is “E-Learning” And “Webinar” Training, And What Are The Additional Requirements For Each?
The guidelines define “e-learning” as “individualized, interactive, computer-based training whose content is written, developed and approved by an instructional designer(s), qualified trainer(s) or subject matter expert(s).” “Webinar” is defined as “an internet-based seminar created and taught by a qualified trainer and transmitted over the internet or intranet in real time.” Employers may also opt for “other effective interactive training and education,” which may include the use of “audio, video or computer technology in conjunction with classroom, webinar and/or e-learning training.”

In the event that the employer opts for an e-learning alternative to classroom training, the Commission requires that employers provide supervisors with trainers or educators who will make themselves available “within a reasonable period of time” to answer any questions the supervisor may have relating to the training. Furthermore, if a webinar format is utilized the Commission requires that employers obtain records demonstrating that a learner “attended the entire training and actively participated in the training’s interactive content, discussion questions, hypothetical scenarios, quizzes or tests, and activities.” Finally, employers must comply with the minimum two hour harassment training requirement. That requirement may be fulfilled by two classroom hours, two webinar training hours, or “in the case of an e-learning program, a program that takes the supervisor no less than two hours to complete.”

Who Is Fit To A Be A “Qualified Trainer”?
The guidelines define a “qualified trainer” as an individual who has “legal education coupled with practical experience, or substantial practical experience in harassment, discrimination and retaliation” that can “effectively lead in-person or webinars.” The trainer must be qualified to train on a number of issues related to harassment as outlined by the FEHC guidelines.

How Do You Track Training?
Employers are required to provide training once every two years and have the option of using “individual” or “training year” tracking. Under the “individual” tracking system, an employer simply tracks “its training requirement for each supervisory employee, measured two years from the date of completion of the last training of the individual supervisor.”

Alternatively, an employer may use the “training year” tracking method and thereby “designate a ‘training year’ in which it trains its supervisory employees.” The employer will then retrain the supervisory employees no later than the next “training year,” two years later. In the case of newly hired or promoted supervisors who receive training within six months of assuming their supervisory positions, but in a different training year, “the employer may include them in the next group training year, even if it occurs sooner than two years.” Furthermore, a supervisor who has received anti-harassment training in compliance with the statute within the prior two years from either a current, prior or alternate joint employer “need only be given, be required to read and acknowledge receipt of, the employer’s antiharassment policy within six months of assuming” the new supervisory position or “within six months of employer’s eligibility.” The current employer, however, will have the burden of establishing the legal compliance with this section of the previous training. The employer may then place new supervisors on the two year track schedule.

What Records Should Be Kept And For How Long?
The Commission requires that employers keep documentation of harassment training in order to track compliance. The records should include “the name of the supervisory employee trained, the date of training, the type of training, and the name of the training provider.” The documentation records should be kept for a minimum of two years. What Should You Do To Ensure That Your Training Is In Compliance With The Law? Given the gravity and ramifications of sexual harassment claims, employers should consider taking some time to evaluate and strengthen their harassment training programs to meet the legal specifications. The following steps may help you in this process.

  • Know whether or not you are subject to the training statute. You may safely assume that you are subject to the training statute if you have 50 or more full time, part time, or temporary employees or contractors and at least one of them lives or works in California.
  • Train all supervisors who “directly” supervise California employees. If you are not sure whether the supervision is “direct” or otherwise, assume it is direct and train them.
  • Maintain a fixed training schedule that is easily enforceable. Group your supervisors by “training year” and set fixed training schedules to facilitate your training requirement.
  • Evaluate your training programs regularly. Look for any changes in applicable California and federal law.
  • Protect yourself from harassment claims by going beyond the minimum training required. Consider:
    (a) expanding harassment training to include topics that are recommended but not required under the law;
    (b) training your supervisory employees even if your company is not subject to Section 12950.1; and
    (c) providing more than the minimum two hour training.

The Expansion of Whistleblower Protection: What Every Employer Should Know

Over the last few years, California courts have been flooded with wrongful discharge lawsuits. We noted in an earlier article that California appellate courts have expanded the situations in which employees may bring claims against their employers, particularly in retaliation lawsuits. Recent cases further exemplify the growing trend to liberalize wrongful discharge lawsuits. Because the California Supreme Court has declined to review these cases, it is not immediately clear what long term impact these decisions will have on at-will employment principles. What is clear is that employers should take steps to understand current regulations and case law to avoid a wrongful discharge lawsuit.

Public Policy In A Wrongful Discharge Suit
An employee may bring a wrongful discharge suit against the employer if the employee can demonstrate that the discharge violated fundamental and substantial public policy. The California Supreme Court has held that a wrongful termination action based on violation of public policy must be grounded on some constitutional, statutory, or regulatory basis. In the past, courts interpreted that requirement to mean the violation must inure to the public interest—simply put, such violations were required to affect the public at large and not just private individuals.

It is unclear if this remains true given a recent case that resulted in a favorable outcome to an employee based on his individual claim of unsafe working conditions. In that case, a maintenance mechanic was terminated after refusing to clean up a containment area. While the containment area did not violate any safety standards, the area did store corrosive materials that could have been fatal if not handled correctly. The employee argued that the clean up of that area was not part of his job description, he was not trained in such tasks, and he believed the assignment was unsafe. He premised his belief that the area was unsafe on one past incident where another employee was injured from touching the chemicals.

The employee was discharged following his refusal to perform the assigned task. After his termination, the employee sued, claiming that the termination violated public policy. After the lower court proceedings resulted in an appeal, the appellate court ruled in favor of the employee, noting that the employee had a reasonable “good faith” belief that the assignment was unsafe.

What Is Good Faith?
Traditionally, the phrase “good faith” is understood to denote an act that is honest in purpose, free from intent to defraud, and generally speaking, faithful to one’s duty or obligation. This definition is generally broad and often left for the jury to decide.

The appellate court’s approach to the definition of good faith in this case was even more relaxed and gives employers cause to be worried. The appellate court’s decision, read broadly, means that an employee need not show that the actual work that he is complaining about is unsafe, just that he, in good faith, believes that it is unsafe. While the employee’s belief must also be reasonable, the employee can simply point to past unsafe conditions and complaints to demonstrate that he has a reasonable fear that the current condition is unsafe.

Although the California Supreme Court has refused to review this case, past decisions seem to support the appellate court’s ruling. In 1991, the California Supreme Court stated that an employee need not prove an actual violation of law in order to establish wrongful termination. The fact that he reasonably believed that the activity was illegal sufficed to demonstrate that he was wrongfully terminated. That decision implied that no actual harm or violation must exist, only that the employee in good faith believed that it did at the time.

How Does This Affect Employers?
Naturally, this liberal construction of good faith will contribute to the already growing number of lawsuits. As a result, employers should be prepared to update current termination policies in order to prevent a claim. Here are a few simple steps an employer should take in order to avoid litigation.

Make sure employment handbooks discuss anti-retaliation policies. Talk about these policies with employees (particularly supervisors/managers), make clear that the company does not tolerate retaliation, and stress that any perceived retaliation should be immediately reported. If an employee refuses to work, ask the employee why he is refusing to perform. Document these discussions. If the refusal is based on the employee’s concern that it would violate a law, regulation, or pose health concerns, seek legal advice before terminating the employee. Keep complaints confidential and investigations discreet. This minimizes unnecessary third party involvement and makes it easier for employers to show that no one involved in the decision leading to the termination had a retaliatory motive.

Monitoring Your Employees’ Activities: How Far Can You Go and What Do They Expect?

Monitoring employee activity, both on and off the job, has never been more relevant than it is in today’s increasingly wired and cost conscious world. Ten years ago, who could have imagined that disgruntled employees could let their feelings be known to literally millions of people from their P.C. at home? Who would have imagined that happy employees could waste countless hours on the job keeping track of their favorite sporting event from their cubicle, or having real-time conversations on their computer with a friend on the other side of the country? With the proliferation of the Internet and the advent of personal websites, web logs, e-mail, and ESPN.com, all of these drags on productivity have become a reality.

Unfortunately, the law has always been slow to keep up with modern advances, and the Internet and all of its progeny are no exception. All we can do is apply the law that we have to the world in which we find ourselves.

In California, an employee has a constitutionally protected right to privacy that can be enforced against a private employer. To maintain a cause of action for an invasion of the constitutional right to privacy, the plaintiff must satisfy several threshold elements. These elements are:

1) that there is a legally protected privacy interest;

2) that the employee enjoys a reasonable expectation of privacy; and

3) that the conduct of the employer constitutes a serious invasion of privacy. An employer may defend against an invasion of privacy claim by defeating any of these elements.

An employer’s written policy, acknowledged by the employee, may defeat the employee’s reasonable expectation of privacy. In fact, in a recent California case, the court found that employers can diminish an individual employee’s expectation of privacy by clearly stating in their policy that electronic communications are to be used solely for company business and that the company reserves the right to monitor or access all employee Internet or e-mail usage. This finding has broad implications that can be applied to a variety of modern monitoring scenarios.

Email Monitoring
Because the California Constitution protects employee privacy as to electronic monitoring only when employees have a “reasonable expectation of privacy,” a well crafted policy clarifying that the employer reserves the right to monitor electronic and other communications at work serves to diminish any employee privacy expectation with regard to the use of company computers, telephones, and e-mail. Such a policy, when disseminated, will preserve your right to reasonably monitor these communications, particularly e-mail on the company system.

Given that such privacy policies greatly reduce potential liability and may soon be legislated in California anyway, it makes good business sense to draft and distribute a policy now rather than later.

Internet Use
Employers can prohibit personal Internet use on a company computer. In fact, one California court has held that an employer can terminate an employee for accessing pornographic websites from home on a company computer when the employer had an appropriate electronic monitoring policy in place. In that case, the company had provided the personal computer to the employee and had a very clear policy in place preserving its right to monitor the use of company provided computers as necessary.

Employers should use care not to exceed the bounds of their rights in accessing Internet websites that employees have visited or created. Although an employer’s activities may not be an invasion of the employee’s privacy, the conduct may constitute an intrusion into protected activities, concerted action, political activities or off-duty conduct.

Web Logs
A relatively new phenomenon is “blogging.” Blogs, short for web logs, are online logs or journals in which employees (or anyone else with a computer) voice their opinions about anything they wish…including their employers. What can an employer do if an employee is disparaging the employer online?

If an employee is disseminating trade secrets, defamatory comments or is “blogging” on company time or computers, then an employer can probably safely terminate the employee. An employer may also be able to terminate an at-will employee who is bad-mouthing, ridiculing or generally denigrating the company, a boss or, worst of all, the employer’s product. However, the operative word is “may.” Taking adverse action against even at-will employees for blogging on their own time, especially when those blogs are not defamatory or do not implicate trade secrets, may raise issues involving discrimination, retaliation, and political and free speech. In many cases, your reaction to a blog entry could end up costing you much more than the original blog post ever would have. Aside from these issues, monitoring employee’s blogs also gets into the thorny area of controlling what the employee does on his or her own time.

Regulating Off-Duty Choices
While the Internet and employee monitoring are hot issues in employment law right now, offduty conduct by employees has also been making the news. Recently, some companies have begun experimenting with rules regarding their employees’ conduct away from work, particularly when that conduct impacts the employer’s health care premiums. Employees have countered by claiming that off-duty conduct is not an appropriate subject for scrutiny or control by an employer.

When an employer wants to regulate off-duty conduct it must primarily be done through contract and it must be based on a legitimate business need. For example, some employers have started programs designed to improve employee health. The most widespread of these new programs are those which attempt to prohibit smoking. Generally, these programs have been voluntary and based on incentives to quit. However, a new case in Michigan has garnered a great deal of attention because it is not a voluntary program and the employer tested its employees to ensure compliance. This program has been challenged by several employees and the employer will be forced to defend the policy in court. Regardless of the outcome of the Michigan case, California statutorily protects legal off-duty conduct by employees and healthy lifestyle policies may violate these statutory protections.

At this point there have been no California cases testing whether healthy lifestyle policies violate employee privacy rights and it is worth asking if your company wants to be the first to test those uncertain waters. It should be noted that, if such policies are not carefully considered and drafted, they could end up implicating issues other than privacy, such as the ADA (i.e., policies targeting disabilities) or age discrimination (i.e., policies targeting medical conditions such as cholesterol-levels or high blood pressure).

Failure To Notify Employee Of Cobra Rights May Subject Employer To Liability

As you probably know, the Consolidated Omnibus Budget Reconciliation Act, commonly known as COBRA, allows employees to elect to continue health coverage under an employer-sponsored health plan for a certain period of time following the termination of employment or other qualifying event. Once an employee elects continuation coverage, the employee is responsible for paying the premiums required to keep the coverage in effect. Generally, the insurer provides the required notice explaining continuation coverage rights to the employee after a qualifying event. The employee then has 60 days to elect coverage.

In a new federal court case out of Michigan, however, the employer was found liable to an employee for damages suffered due to a failure to provide the proper COBRA notification, even though the employer had contracted with a third-party administrator to provide the notification. In Linden v. Harding Tube Corp., the court explained that ERISA imposes a responsibility upon a plan sponsor to provide appropriate notification regarding COBRA coverage rights. A plan sponsor is defined as the employer in the case of an employee benefit plan established or maintained by a single employer. The court went on to explain that there could be no dispute that the regulations with respect to COBRA notification had been violated because neither the employer nor the company with whom it had contracted to provide COBRA notifications had notified the insurance carrier that there should be continuation coverage or paid the premium necessary to activate the coverage. As the plan sponsor, the employer is initially liable for those violations. The court left it up to the jury to decide whether the employer could recover from the third-party with whom it had contracted for the damages it had to pay its ex-employee.

The lesson to be taken from this case is that if there is a failure to communicate COBRA continuation rights to an employee following a qualifying event, the employer will ultimately be responsible for that failure if the employer is also the plan sponsor. If you contract with a third-party to provide COBRA notification rights, you should make sure that copies of the appropriate notices following a qualifying event are sent to you so that you can ensure the notifications have been made in a timely fashion. If they are not, you could be held responsible for any medical costs incurred by your ex-employee during any time that he was uninsured because of your failure to provide the appropriate notification.

Identity Theft in the Workplace: Protecting Your Employees-And Yourself

As you have probably heard, identity theft across the nation is growing at an alarming rate, particularly in the workplace. With this upsurge, victims are increasingly looking to recover damages from the companies from which their information was stolen.

What Is Identity Theft?
Identity theft occurs when someone uses the personal information (usually a social security number, name, date of birth, or credit card number) of another fraudulently and without permission. The thief typically uses this information to obtain money, goods, or services, but identity theft is also used to obtain identification cards and other government-issued documents.

Identity Theft – A Growing Problem
According to FBI statistics, identity theft is our nation’s fastest growing crime. In 2004, the Federal Trade Commission, which operates a nationwide identity theft hotline, announced that for the fourth straight year identity theft topped the list of consumer complaints. In 2004 alone, the FTC reported that there were almost 44,000 victims of identity theft in California. With 122 victims per 100,000 people, California ranked third in the nation behind only Nevada and Arizona.

The Legislative Response
Legislative response to the rise in identity theft has occurred on the national and state levels. In 1998, Congress passed a law making it a federal crime to use another’s identity to carry out an activity that violates federal law or that is a felony under state law. Similarly, California law now makes it a felony to use the personal identifying information of another for any unlawful purpose without the authorization of that person. A California statute also requires businesses and government agencies to notify consumers if hackers gain entry to computers that contain unencrypted personal information such as credit cards, social security numbers, and driver’s license numbers. That same statute allows any person injured by a violation of the law to file a civil suit against the company or agency.

Expansion Of Identity Theft Into The Workplace
Initially, stealing mail and wallets was the primary form of identity theft, but recently criminals have expanded to hacking into computers and copying company databases to obtain private information. Two examples illustrate the expansion of identity theft into the workplace. First, in San Diego, a dishonest employee obtained access to a storage room where past payroll information was filed. The employee obtained Social Security numbers from 100 current and former employees and used them to obtain credit in their names. Second, a Nigerian crime ring was employed temporarily at a very large corporation. One of the Nigerian employees downloaded an employee list containing social security numbers, then used the numbers to obtain credit and make fraudulent purchases. The employees did not know about the concerted thievery until they shared stories with their co-workers and learned that many of them had been victimized.

Identity Theft & The Employer – New Grounds For Recovery
Employees and their lawyers are considering potential grounds for recovery of when their personal information is misappropriated from work. Case law is relatively undeveloped, but two theories have materialized as potential grounds for recovery. The first theory is based on invasion of privacy. A short time ago, 204 employees of a Minnesota trucking company filed a class action lawsuit against their employer after their social security numbers were faxed to 16 terminal managers. They claimed that this was an invasion of privacy because the company released personal, confidential information without their permission. The Minnesota Court of Appeals agreed, and overturned a trial court order dismissing the claim. The trucking company sought review of the ruling, and the Minnesota Supreme Court overruled the Court of Appeals, finding that the employer’s dissemination of social security numbers to terminal managers did not constitute publication under the definition of invasion of privacy. Although the anti-employer decision was overturned, the case demonstrates a legitimate possibility that an employer’s failure to guard against disclosure of employees’ confidential information could lead to invasion of privacy lawsuits. The second theory is based on negligence principles. Recently, a Michigan appellate court upheld a $275,000 jury verdict awarded to several 911 operators who were victims of identity theft. The plaintiffs filed a negligence action against their union after discovering that the person behind their identity theft was the daughter of the union treasurer. The union treasurer took private company records out of the office, and her daughter somehow obtained the information and misused it. In upholding the verdict, the court found that the union owed a duty of care to its members, and that identity theft was a foreseeable consequence of a breach of that duty. Although limiting its holding to the facts, the decision signals a wakeup call to employers—take proper steps to ensure confidentiality of your employee’s private information, or be liable for the consequences.

How To Protect Yourself – A Self Survey
For tips on how to avoid or limit liability in the event that identity theft strikes the workplace, check the Identity Theft Resource Center website, accessible at www.idtheftcenter.org.

DLSE Proposes New Regulation Clarifying Meal Period Requirements

Existing law requires that an employee who works more than five hours a day must be provided with a meal period of not less than 30 minutes, except that if the total work period per day is no more than six hours, the meal period may be waived by mutual consent. An employee who works for more than 10 hours a day must be provided with a second meal period of not less than 30 minutes, except that if the total hours worked are no more than 12 hours, the second meal period may be waived by mutual consent, but only if the first meal period was not waived. To give you an idea of how costly violating this law can be, a jury in Oakland recently awarded $172 million to thousands of employees who claimed that Wal-Mart denied them these required meal periods.

The Division of Labor Standards Enforcement (DLSE) has proposed a new regulation clarifying an employer’s obligation to provide meal periods to its employees. The proposed regulation defines the term provide as “to supply or make available a meal period to the employee and give the employee the opportunity to take the meal period.” The proposed regulation clarifies that an employer is deemed to have provided a meal period to an employee if the employer: (1) has informed the employee, either orally or in writing, of his or her right to take a meal period; (2) gives the employee the opportunity to take the meal period; and (3) maintains accurate time records. Notwithstanding these three criteria, an employer may still establish by a preponderance of the evidence that a meal period was in fact actually supplied or made available to the employee and the employee was in fact actually given the opportunity to take the meal period. The proposed regulation also clarifies when the required meal period(s) must begin. For employees who work more than five hours but no more than six hours per day, the meal period must be provided during the sixth hour of work, but may be provided earlier. For example, if an employee works from 8 a.m. to 2 p.m., the 30 minute meal period must be provided between 1:01 p.m. and 2:00 p.m., but may be provided earlier. Moreover, the employer and employee can mutually waive the employer’s obligation to provide a meal period.

For employees who work more than six hours but no more than 10 hours per day, the meal period must be provided before the completion of the sixth hour of work. The employer cannot waive its obligation to provide the meal period. However, an employee may initiate a request for approval from the employer to: (A) not take the meal period for that day; or (B) take only a portion of the meal period for that day. The employer has the discretion to approve or deny the request. The employer’s approval or denial of such request is not a violation of the employer’s duty to provide a meal period.

For employees who work more than 10 hours but no more than 12 hours per day, the employer must provide a second 30 minute meal period. The second meal period may be provided any time between 10 hours and 1 minute and 12 hours. If the total hours worked are no more than 12 hours, the employer’s obligation to provide a second meal period may be waived by mutual consent of the employer and the employee, but only if the first meal period was not waived.

The DLSE’s proposed regulation has already undergone two rounds of rather substantial revisions. The DLSE is currently considering comments to the most recent version of the proposed regulation, and may revise the proposed regulation yet again. As soon as the regulation is finalized and adopted, we will update you in a future edition of this newsletter.

2006 Legislative Update

2005 was a slow year for new employment-related legislation, and much of the new legislation is limited to certain types of employers or employees. Here is a synopsis of the more notable legislative activity.

Computer Professional Exemption Clarified
Existing law provides that employees in the computer software field may qualify for overtime exemption if certain conditions are met. One of those conditions is that the employee’s hourly rate of pay is not less than $41. A new law now clarifies that this condition is met if the employee’s hourly rate is not less than $41 or the annualized full-time salary equivalent of that rate, provided that in each workweek the employee receives not less than $41 per hour worked. Note that, under both the old and the new laws, an employee in the computer software field is not exempt from overtime requirements unless all of the following additional conditions are met:

1. The employee is primarily engaged in work that is intellectual or creative and that requires the exercise of discretion and independent judgment. 2. The employee is primarily engaged in duties that consist of one or more of the following: A. The application of systems analysis techniques and procedures, including consulting with users to determine hardware, software, or system functional specifications. B. The design, development, documentation, analysis, creation, testing, or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications. C. The documentation, testing, creation, or modification of computer programs related to the design of software or hardware for computer operating systems. 3. The employee is highly skilled and is proficient in the theoretical and practical application of highly specialized information to computer systems analysis, programming, and software engineering.

Deadline For Filing Fair Employment And Housing Act Claims Extended For Minors The Fair Employment and Housing Act (“FEHA”) prohibits discrimination, harassment and retaliation. Under current law, an employee who believes that her employer violated FEHA must file a complaint with the Department of Fair Employment and Housing within one year from the date upon which the allegedly unlawful conduct occurred. Effective January 1, 2006, this period is extended for up to one year after the employee reaches age 18.

Final Wages May Now Be Paid By Direct Deposit
Existing law has long allowed an employer to pay wages by direct deposit, so long as the employee has voluntarily authorized direct deposit. Final wages, however, could not be paid by direct deposit. Effective January 1, 2006, Labor Code section 213 has been amended to provide that final wages may be paid by direct deposit, so long as the employer complies with all other requirements regarding the payment of final wages.

Wage Statements
When an employer pays an employee’s wages, the employer must furnish the employee with an accurate itemized statement showing, among other things, the name of the employee and his or her social security number. By January 1, 2008, existing law requires the employer to include no more than the last four digits of the employee’s social security number or an existing employee identification number other than a social security number. This law has been clarified to provide that, by January 1, 2008, the employer must include on the itemized statement the last four digits of the employee’s social security number or an employee identification number other than a social security number. In other words, if you were intending to comply with the new requirement by including the last three digits of your employees’ social security numbers on their statements, you now need to include the last four digits.

Unruh Civil Rights Act Expanded
The Unruh Civil Rights Act generally prohibits business establishments from discriminating on the basis of sex, race, color, religion, ancestry, national origin, disability or medical condition. The Act has now been expanded to explicitly prohibit business establishments from discriminating on the basis of marital status or sexual orientation.

Service Of Labor Commissioner Complaints, Notices And Decisions
The Labor Commissioner is authorized to investigate employee complaints and provide for a hearing in any action to recover wages, penalties and other demands for compensation. A new law provides that, in such proceedings, the complaint, notices, and decision may be served by leaving a copy of the document at the home or office of the person being served and thereafter mailing a copy of the document to the person at the place where a copy was left. This new law was enacted to address the problem of employers who tried to avoid personal service of labor commissioner documents by refusing to sign for the documents.

Public Works Payroll Records
Existing law provides for the payment of prevailing wages on certain public works, and requires each contractor and subcontractor performing work on a public work to keep payroll records regarding his or her employees. Senate Bill 759 amends this requirement by specifying that the payroll records may consist of printouts of payroll data that are maintained as computer records, if the printouts contain the same data and are verified in the same manner as required for other payroll records.

DLSE Proposes New Regulation Clarifying Meal Period Requirements
By Kim Johnston
Existing law requires that an employee who works more than five hours a day must be provided with a meal period of not less than 30 minutes, except that if the total work period per day is no more than six hours, the meal period may be waived by mutual consent. An employee who works for more than 10 hours a day must be provided with a second meal period of not less than 30 minutes, except that if the total hours worked are no more than 12 hours, the second meal period may be waived by mutual consent, but only if the first meal period was not waived. To give you an idea of how costly violating this law can be, a jury in Oakland recently awarded $172 million to thousands of employees who claimed that Wal-Mart denied them these required meal periods.

The Division of Labor Standards Enforcement (DLSE) has proposed a new regulation clarifying an employer’s obligation to provide meal periods to its employees. The proposed regulation defines the term provide as “to supply or make available a meal period to the employee and give the employee the opportunity to take the meal period.” The proposed regulation clarifies that an employer is deemed to have provided a meal period to an employee if the employer: (1) has informed the employee, either orally or in writing, of his or her right to take a meal period; (2) gives the employee the opportunity to take the meal period; and (3) maintains accurate time records. Notwithstanding these three criteria, an employer may still establish by a preponderance of the evidence that a meal period was in fact actually supplied or made available to the employee and the employee was in fact actually given the opportunity to take the meal period.

The proposed regulation also clarifies when the required meal period(s) must begin. For employees who work more than five hours but no more than six hours per day, the meal period must be provided during the sixth hour of work, but may be provided earlier. For example, if an employee works from 8 a.m. to 2 p.m., the 30 minute meal period must be provided between 1:01 p.m. and 2:00 p.m., but may be provided earlier. Moreover, the employer and employee can mutually waive the employer’s obligation to provide a meal period.

For employees who work more than six hours but no more than 10 hours per day, the meal period must be provided before the completion of the sixth hour of work. The employer cannot waive its obligation to provide the meal period. However, an employee may initiate a request for approval from the employer to: (A) not take the meal period for that day; or (B) take only a portion of the meal period for that day. The employer has the discretion to approve or deny the request. The employer’s approval or denial of such request is not a violation of the employer’s duty to provide a meal period.

For employees who work more than 10 hours but no more than 12 hours per day, the employer must provide a second 30 minute meal period. The second meal period may be provided anytime between 10 hours and 1 minute and 12 hours. If the total hours worked are no more than 12 hours, the employer’s obligation to provide a second meal period may be waived by mutual consent of the employer and the employee, but only if the first meal period was not waived.

The DLSE’s proposed regulation has already undergone two rounds of rather substantial revisions. The DLSE is currently considering comments to the most recent version of the proposed regulation, and may revise the proposed regulation yet again. As soon as the regulation is finalized and adopted, we will update you on its requirements in a future edition of this newsletter.

What Happened to the Changes in the Meal Period Requirements?

Proposed Changes
As we previously informed you, on January 14, 2005, the Division of Labor Standards Enforcement (DLSE) issued a proposed meal and rest period regulation. The intent behind the proposed regulation was to provide clarity and flexibility with regard to the meal and rest period requirements. The proposed regulation addressed the timing of meal periods, the requirements for “providing” a meal period, and the classification of any money paid for failure to provide a meal period.

However, the DLSE failed to complete the rulemaking process and promulgate a final rule by the January 14, 2006 deadline. On that date, the proposed regulation lapsed, leaving employers with the law as it existed prior to the proposed regulation. Therefore, employers must be aware of and properly follow the applicable law in place before the proposed DLSE regulation.

Meal Period Requirements In Effect Prior To The DLSE’s Proposed Regulation And Still In Effect Today
Because the DLSE’s proposed regulation failed to take effect, employers are left to deal with the less-than-clear law in place prior to the proposed DLSE regulation. As always, diligence on the part of employers in following the law will help prevent lawsuits by employees and protect the interests of employers.

Currently, an employee who works at least five hours a day must receive an unpaid meal period of at least 30 minutes. However, if the total work period is less than six hours, the meal period can be waived with the mutual consent of the employer and employee. Additionally, a second meal period is required if the employee works more than 10 hours. Again, however, this meal period can be waived with the mutual consent of the employer and employee if the total work period is less than 12 hours and the first meal period was not waived.

Prior to the DLSE’s proposed regulation, the DLSE took the position that meal periods had to start before the end of the fifth hour for the first meal period and before the end of the tenth hour for the second meal period. Thus, employers should continue to follow this mandate in an effort to ensure that meal periods are timely taken. As for “providing” the meal period required by the law, the onus is on the employer to make sure that employees take their required meal periods at the required times. If the employer fails to provide a required meal period, the employer must pay one additional hour of pay at the employee’s regular rate of pay for each workday that the meal period is not provided in addition to paying for the time that the employee worked during the period. The failure to provide meal periods can be very costly. In a recent class-action suit, a jury returned a $172 million verdict against Wal-Mart for denying employees their legally required meal and rest periods. The potential for large verdicts and costly court battles necessitates diligence in ensuring that employees are taking their required meal periods.

If Meal Periods Are Missed And The Employer Must Pay, Is The Payment A Penalty Or Wages?
When employers pay for meal periods missed by employees, the payment can arguably represent either wages to the employee or a penalty against the employer. If the payment is characterized as a penalty, the employee must file a claim within one year, whereas a claim for wages must be filed within three (sometimes four) years. Additionally, a penalty, unlike wages, is not subject to income tax withholding. Finally, if the payment is characterized as a penalty, the employee cannot seek attorneys’ fees under the wage recovery statutes.

The lapse of the proposed DLSE regulation that would have clarified this area of law left employers without a definite answer to this issue. Further, no clear answer has been provided by the courts. In May of 2005, the Labor Commissioner issued an opinion that such payments were penalties. Additionally, two California appellate courts that have addressed the issue agree with the Labor Commissioner that such payments are penalties. However, another California appellate court has ruled that such payments represent wages to the employee. Because of this split of authority and the importance of the issue, the California Supreme Court has granted review of one of the cases to provide a definitive answer.

Conclusion
While employers may have heard or read about proposed changes to the meal period requirements, the proposed regulation that would have made such changes lapsed on January 14, 2006. Thus, any proposed changes regarding meal periods did not take effect and the law existing prior to the proposed regulation is still in force. In order to avoid liability for missed meal periods, employers must be proactive in making sure that employees take their meal periods at the appropriate times. Otherwise, employers may face costly lawsuits by employees.