Essential Employment Law Practices: How to Avoid Getting Sued

Essential Employment Law Practices: How to Avoid Getting Sued

Christopher W. Olmsted, Esq.

Barker Olmsted & Barnier, APLC © 2010www.barkerolmsted.com

Introduction

Volunteers, students, independent contractors

Exempt employees Meal and rest periods Overtime Travel time Other wage and hour laws Leaves of absences Q & A

Today’s Topics

Who Is NOT Your Employee?


Volunteers

Volunteers are not employees. Volunteers intend to donate their services

to religious, charitable, or similar nonprofit corporations without contemplation of pay and for public service, religious, or humanitarian objectives

Work “without contemplation of pay” In-Kind Compensation might count as

contemplation. (e.g. food, shelter, transportation, medical benefits)

“Work therapy”?


Volunteers

Volunteers are not employees. Exception: nonprofit providing

commercial services to general public (restaurants, thrift stores) or contract to provide personal services to businesses

Problem: Employee who is also a volunteer No volunteering to do regular work in

same workweek (job description?) Different work likely ok


Student Interns – Federal Rules

1) Like School. The training, though it may include actual operation of the employer’s facilities, is similar to training that would be given in a vocational school.

2) Student Benefit. The training is for the benefit of the student.

3) No Displacement. The student does not displace regular employees, but works under close observation of a regular employee.


Student Interns – Federal Rules

4) No Advantage. The employer that provides the training receives no immediate advantage from the activities of the trainees or students and, on occasion, his operations may even be impeded.

5) No Job Entitlement. The student is not necessarily entitled to a job at the conclusion of the training period.

6) Agreement. The employer and the student understand that the student is not entitled to wages for the time spent training.


Student Interns – California Rules

7) Curriculum. Any clinical training is part of an educational curriculum.

8) No Benefits. The trainees or students do not receive employee benefits.

9) Generic. The training is general, so as to qualify the trainees or students for work in any similar business, rather than designated specifically for a job with the employer offering the program. In other words, on completion of the program, the trainees or students must not be fully trained to work specifically for only the employer offering the program.


Student Interns – California Rules

10) Separate Hiring Criteria. The screening process for the program is not the same as for employment, and does not appear to be for that purpose, but involves only criteria relevant for admission to an independent educational program.

11) Clear Ads. Advertisements for the program are couched clearly in terms of education or training, rather than employment, although the employer may indicate that qualified graduates will be considered for employment.


Student Intern Tips

Keep It Real. Don’t try to create or fill a “free labor” position.

School Program. In California, the internship should be arranged through a school program that includes internship as part of the curriculum.

Pay. If in doubt, pay minimum wage.


Independent Contractors

California EDD Payroll Taxes

Labor Commissioner / DLSE Workers’

Compensation District Attorney

Criminal Sanctions Private Litigants

Your Employees


Employee vs. Independent Contractor

Primary Factor: Control over work done

and manner of performance

Secondary Factors: Separate businessNo supervisionSkill Tools, place of workPaid by job/pieceRisk of lossBeliefLength of timeTrainingIntegration


Recent Trends

Federal Legislation Safe Harbor Under

Attack California Legislation

More Penalties California Case Law

Independence A Rarity

Exempt Employees


Who is Exempt?

Common Categories Executive

Administrative

Professional

Computer Tech

Sales


Who is Exempt in California?

1. Salary Test Salary must be no less than 2x

minimum wage Minimum salary for executive,

professional and administrative exemption $2,600/month or $31,200/year

2. Duties Test Engaged primarily in exempt duties

which require exercise of discretion and independent judgment.


Nonprofits

Executive Director Administrative

Exemption – HR, accounting

Professional – licensed practitioners


Pop Quiz

TRUE OR FALSE? Salary = Exempt Job Title = Exempt Employee Preference = Exempt Got Away With It Before =

Exempt Industry practice = Exempt

FALSE FALSE FALSE FALSE FALSE


Practical Solutions

Assume Non-exempt Use Job Descriptions + Actual

Duties Be accurate! (Actual duties and time

spent/duty.) Audit/monitoring Get Legal Advice

Wage and Hour Issues


Wage and Hour Laws

California Labor Code Wage Orders (regulations) DLSE opinions and

enforcement manual State court cases

Federal Fair Labor Standards Act (FLSA) DOL regulations Wage and Hour Division

opinions Federal court cases


Meal Periods (In General)

When Required? 0-5 hours: no meal period

required 5:01-6 hours: must “provide” one

30 minute meal period, but can be waived by mutual agreement

6:01-10 hours: must “provide” one 30 minute meal period

10:01-12 hours: second 30 minute meal period, can be waived by mutual agreement if first not waived

Must keep accurate time records


Meal Periods

Unpaid if: Completely relieved of all duties Free to leave work station At least 30-minutes

On-duty meal period Voluntary written agreement,

expressly revocable Paid (counts as hours worked) Permitted only when the nature of the

work prevents the employee from being relieved of all duty (narrowly interpreted)


Meal Periods

Employer Burden To Ensure Meal Period

Employer Obligation To Record Meal Periods

Meal Period Premium (1 hr pay) for Missed Breaks or Insufficient Breaks


Enforcement

Federal Department of Labor (DOL)

State Department of Industrial Relations (DIR), Division of Labor Standards Enforcement (DLSE)

Employee lawsuits and class actions


How to avoid being sued

Force employees to take meal and rest periods as required by law

Consider IT solution to track hours worked

Have a written policy Acknowledgment form on time cards

Consider using written waivers Combine with 6 hour shifts

Pay Meal/Rest Period Premium when incurred.


Rest Periods

10-minutes per 4 hours (or major fraction thereof).

As close to the middle of the 4 hour period as practical

Not needed if less than 3.5 hours worked

Rest period counted as time worked = paid

Missed rest period: “Premium” of

one hour pay at regular rate.


Record Keeping Requirements Required to keep accurate records of all hours worked For non-exempt employee, times required daily:

start of work day start of meal period end of meal period end of work day


Overtime Premiums–More than 40 hours in one work week (1.5x pay)

–More than 8 hours a day (1.5x pay)

–More than 12 hours in one work day (2x pay)

–First 8 hours of seventh consecutive day of work in any work week (1.5x pay)

–More than 8 hours on the seventh consecutive day of any work week (2x pay)

•Unauthorized overtime

•Nonprofits: unrecorded overtime


Overtime (Cont’d)

General rules: determine “work day” no pyramiding of hours each workday separate Holidays, Saturdays, or Sundays

“Regular Rate of Pay” issues Avoid Compensatory Time Off


Make Up Time: Overtime Exception

Make up in the same workweek in which the time is missed;

Written request each time (up to 4 weeks in advance);

The time missed must be due to personal reasons of employee;

The time made up must not cause the employee’s work to exceed 11 hours in day or 40 hours in week;

The employer must approve the request; The employer must not encourage or solicit

the request.


Furlough For Exempt Workers

General rule: fixed salary, no reductions.

Temporary furlough: Reduction in salary plus reduction in pay acceptable

Other exceptions: Full week absence Pro rata first/last week Full day absence, exhausted

sick plan


Travel Time – Rutti v. LoJack

General Rule: Regular commutes not compensable.

Company Vehicles: Commuting in company vehicle not compensable if:

Federal: Pursuant to employer/employee agreement.

State: control/discretion over commute (route, timing, hauling tools or workers, etc.)

“Incidental restrictions” OK.


Travel Time Tips

Don’t Control. Avoid controlling when an employee leaves for work, the route he takes, or the activities he must engage in on the way (such as picking up materials, equipment, personnel).

Write It. Create written policies or agreements regarding the use of the vehicles, with care towards avoiding too much control such that commute times are compensable.


Travel Expenses

Federal court class action Lewis v. Starbucks

Store manager drove to bank, picked up supplies from vendors, attended meetings.

Mileage not reimbursed. Labor Code 2802 requires

reimbursement for all expenses.

6,000 managers. $3,000,000 settlement.


Travel Expenses

Handbook. Ensure handbook provides that all workers are reimbursed for travel expenses.

Procedures. Implement procedures for employees to claim and receive reimbursement for travel. (e.g. expense form to all workers expected to drive their cars for business reasons). Instruct them to sign and turn in the form each month (regardless of whether actual expenses were incurred).

Training. Train managers and supervisors to collect expense reports or receipts from all employees running errands or otherwise using personal vehicles for company purposes.


After Hours Work – Rutti v. LoJack

General Rule: Pre- and post-shift activities compensable if “integral and indispensable part of the principal activities for which covered workmen are employed.”

Exception: “De minimus” time/work.

Examples: No: Planning the daily route.Yes: Uploading data from home.


Pre- and Post Shift: Cervantes v. Celestica

Facts: waiting in a security line to enter facility before clocking in or out.

Issue: Is time in line compensable? Decision: Maybe.

Employer “controls” employees because they have no choice but to wait in line.

But the de minimus rule might apply (meaning no pay).

Side Issue: Employer liable for temp workers’ pay.


Pre and Post Shift Tips

Monitor. Carefully monitor pre- and post- shift activity to ensure that employees are not engaging in off the clock activities without pay (or pay if they are).

Consult with legal counsel to determine whether certain activities may fall under the “de minimus” exclusion.


Training Classes

Criteria:

1.Attendance is outside of the employee’s regular working hours;

2.Attendance is in fact voluntary (attendance is not voluntary if the employee is led to believe that present working conditions or the continuation of employment would be adversely affected by nonattendance);


Training Classes

Criteria:

3. The course, lecture, or meeting is not directly related to the employee’s job (training is directly related to an employee’s job if it is designed to make the employee handle his job more effectively as distinguished from training him for another job or to a new or additional skill);

Exception to third criteria: Even if the training is clearly related to an employee’s job, voluntary participation outside of working hours need not be compensated if the course corresponds to courses offered by independent bona fide institutions of learning.

4. The employee does not perform any productive work during such attendance.

Employee Contracts


Contract Law

California presumption: At will employment

Express contracts Contracts for a stated term Good cause for termination Dispute resolution

(arbitration) Executive /professional /

sales “Implied” contracts


Types of Agreements

Trade Secret Agreements / Confidentiality Agreements

Non-Compete and Non-solicitation Agreements

Email/internet waiver of privacy agreements (see above)

Employee inventions / proprietary rights

Who has authority to sign?

Leaves of Absence


Leaves of Absence

California Family Rights Act (CFRA)

Family Medical Leave Act (FMLA)

California Pregnancy Disability Leave (PDL)

OthersBasic rights: Protected leave Reinstatement


FMLA/CFRA Overview

Who is a covered employer? 50 or more employees

(located anywhere) Employed on each of 20 or

more workweeks in current or preceding calendar year

20 workweeks need not be consecutive weeks

Count part-time and temporary employees


FMLA/CFRA Overview

Who is an eligible employee? Employed by employer for at

least 12 months (consecutive or not)

Worked at least 1250 hours during 12-month period preceding the first day of leave

Worked at a worksite where 50 or more employees are employed by the employer within 75 miles


Leave Issues

Did the employer/employee follow proper notice procedures?

Did the employee provide proper medical certification in a timely manner?

Did the employer properly reinstate the employee?

Did the employer properly terminate the employee?

Did the company follow its internal leave policies?

Did the employer consider reasonable accommodations under the ADA/FEHA?


Other Issues

Workplace Safety – OSHA Immigration Workers’ Compensation Unemployment/Disability Sexual harassment Discrimination Privacy Defamation

Questions?

Christopher W. OlmstedBarker Olmsted & Barnier, APLC

[email protected]

Business

Essential Employment Law Practices: How to Avoid Getting Sued