News & Events

What You Need to Know about Workplace Law

Q: My secretary puts in a lot of hours due to my busy schedule. It is becoming a problem to pay her all the overtime that she is incurring. Can I change her job title to "Executive Assistant", give her a raise, and put her on salary in order to avoid paying this overtime?

A: No. In California, merely paying an Employee a salary and giving her an important-sounding job title is not the determining factor in whether or not she is entitled to overtime compensation. Rather, the test for whether or not an Employee is exempt (not entitled to overtime compensation) or non-exempt (entitled to overtime compensation) is based on several factors, only one of which is the fact that she is paid a salary.

The most important factor in determining whether someone is exempt or non-exempt is the job duties she is performing on a day-to-day basis. The executive, or managerial, exemption is the exemption most commonly misunderstood. The executive exemption requires that the Employee spend more than 50% of her time performing managerial functions rather than routine, non-managerial tasks.

The other requirements for the exemption are that the Employee must direct the work of at least two Employees, have the ability to hire and fire other Employees or make effective recommendations for hiring and firing, and customarily and regularly exercise discretion and independent judgment

In your situation, your secretary is assisting you in your day-to-day tasks and performing routine, clerical duties nearly 100% of her time. She is not managing anyone and will certainly be found to be non-exempt. Even if you increase her rate of pay, you will not be shielded from liability if she should decide to make a claim against you for unpaid overtime compensation in the future. Rather, you will be liable to her for one and one-half times that higher rate of pay for all of the overtime hours she works without additional compensation.

Q: I have a long-term Employee who has recently begun having performance issues. His mistakes have cost my company some very important clients. If I terminate his employment, do I have to pay him severance because of his long term of employment?

A: No. There is no legal requirement that an Employer provide any severance to an Employee. However, if your company has a policy, whether in writing or just in practice, of providing severance to its Employees then that policy must be applied equally and indiscriminately to all Employees. Typically, a severance payment may be made in order to show appreciation to an Employee for years of service. When a severance payment is made, regardless of the amount and whether the termination was a result of poor performance or simply a layoff for lack of work, you should have an attorney prepare a severance agreement containing a release of claims in order to protect you from future allegations of wrongful termination, discrimination, or other work-related claims.

Q: My Employees are warehouse workers who are primarily men. They have a rough and rowdy attitude at work and tend to talk about women and sexual topics much of the time. We recently hired a female supervisor and she is seeing a lot of their gestures, pictures they hang in their rest break area, and hearing their comments. This was going on before she got there, it is not directed toward her specifically, and I think she should realize that "boys will be boys." Do I need to try to get the men to stop their sexually-charged jokes and comments, or can I just tell her to ignore them?

A: Telling a woman to ignore a sexually offensive comment is not sufficient to shield an Employer from liability for sexual harassment. The jokes, comments, dirty pictures, and other sexually-based activities constitute what is called a hostile work environment. An Employer has a responsibility to prevent an environment of unwelcome conduct based on sex that is sufficiently severe or pervasive to alter working conditions and create an abusive working environment. If your supervisor finds the conditions to which she is being subjected are intolerable, you will likely be liable for sexual harassment because you knew or should have known that the conduct and conditions existed. It is unreasonable to expect any Employee, male or female, to endure this type of environment in the workplace.

Q: I employ mostly men. The few women here complain about the magazine pictures of women who are not fully dressed which are posted on the company bulletin board. Do I face any liability?

A: Yes, substantial liability. First, the pictures themselves are a form of sexual harassment. All that is required is that a reasonable person would find the pictures offensive. Second, once you are aware of sexual harassment or receive a complaint by an Employee, you have an affirmative obligation to investigate and take corrective action to eliminate the offensive pictures. I strongly suggest you immediately remove the pictures and notify all Employees that such behavior in the future will be grounds for discipline, including possible termination.

02/27/2014

1. Q: I have some Employees who never take all of their earned vacation. As a result, some of these Employees have accumulated months of vacation. I know I cannot forfeit their accrued vacation, but is there a way I can stop the excessive accumulation of vacation time?

A: Yes. Since an Employer can determine what vacation policy, if any, it wants, it is legal to provide a cap on the amount of vacation pay that can be accrued. For example, many Employers provide that Employees cannot earn additional vacation once they have accrued a certain number of vacation days. In this situation, the Employees must use the accrued vacation and they will not continue to earn additional vacation until they do so.

2. Q: My company provides Employees with an unpaid half hour lunch break. May we use that time to present safety or other company information?

A: Yes, but it would be expensive to do so. Employees must be paid for the time they are not allowed to have a uninterrupted one-half hour lunch break. In addition, Employees would also be entitled to an hour of compensation for the failure to provide a lunch break where they are relieved of all duties.

3. Q: My Employees have an average of two hours of down time during their workday. They are paid over $30.00 per hour when they are making service calls the other six hours of their day. They are also paid overtime after eight hours in a day. They are not paid for their two hours of down time. As a result, their total pay each day is more than twice the minimum wage of $8.00 per hour. Is this legal?

A: No. A recent California appellate court held that Employees have to be paid at least the California minimum wage for each and every hour they are on duty. To avoid wage claims you should pay the minimum wage for their down time. If your company does not want to increase its labor cost, it should slightly lower the hourly pay rate of pay for the service calls. Remember, Employee compensation cannot be changed retroactively.

4. Q: I understand my company has an obligation to prohibit sexual harassment and discrimination in the workplace. I am confused about other terms such as "sexual assault" and "sexual abuse" and wonder whether they all apply in the workplace.

A: Your question deals with three distinctive types of unlawful behavior.

Sexual harassment is a form of discrimination that highlights Title 7 of the Civil Rights Act of 1964 and California's Fair Employment and Housing Act. The federal law applies to Employers with 15 or more Employees including state and local governments while California law can involve an Employer with a single Employee.

Sexual harassment occurs in a variety of circumstances but generally involves unwelcome sexual advances, request for sexual favors, and other verbal or physical conduct of a sexual nature which constitutes sexual harassment when submission to or rejection to this conduct effects an individual's employment, unreasonably interferes with the individual's work performance, or creates an intimidating, hostile, or offensive work environment.

Sexual assault is conduct of sexual or indecent nature toward another person that is accompanied by actual or threatened physical force that induces fear, shame, or mental suffering. Sexual assault is a general term which covers a wide range of crimes including rape and other forms of coursed sexual behavior involving use of threat, force, violence, or immediate and unlawful bodily harm. Sexual assault in the work place sometimes involves work place threats of physical force which could subject an Employer to civil liability.

Sexual abuse almost always involves children. It is the deliberate exposure of minor children to sexual activity. It would be extremely rare for an Employer to have to deal with a sexual abuse situation in the work place.

5. Q: My company's sales Employees use their personal vehicles to travel from our office to the offices of our various clients. I pay them an excellent salary plus commission. Do I have to pay them for using their personal vehicles?

A: Yes. The California Labor Code requires that an Employer must reimburse its Employees for all expenses they necessarily incur in the discharge of their duties. This includes use of personal vehicles for work-related activities, use of PDA's, cell phones, travel expenses, and any other expenses they incur in the performance of their job.

The California Supreme Court has held that an Employer may utilize any of three different methods of mileage reimbursement: (1) actual expense method; (2) mileage reimbursement method; (3) or a lump-sum method. The actual expense method is the most accurate, but also the most burdensome. The Employer calculates the Employee's actual expenses of using an Employee's personal automobile for business purposes include fuel, maintenance, repairs, insurance, registration, and depreciation. Because this method is quite burdensome and detailed, most Employers choose the mileage reimbursement method, which requires only that the Employee submit the number of miles traveled in the course of her employment. The Employer then multiplies that number by a predetermined amount that approximates the per-mile cost of owning and operating an automobile. This amount is typically se by the Internal Revenue Service and is an approximation based on national average expenses for fuel, maintenance, repair, depreciation, and insurance. The third method, the lump-sum method, permits the Employer to provide its Employees with a fixed amount generally based on the Employer's understanding of the Employee's job duties, including the number of miles that the Employee typically or routinely must drive to perform those duties. The one caveat with any of these methods is that the amount paid must fully reimburse the Employee for all expenses necessarily incurred as a result of the performance of their job duties. If the Employee asserts that the fixed amount paid in the lump-sum method is insufficient to provide such reimbursement, the Employer is required to make up the difference.

02/20/2014

1. Q: My Employees like to eat their meals on their morning and afternoon ten-minute breaks, so they can get paid for all eight hours instead of taking an unpaid half-hour meal break. Is this legal?

A: No. Assuming an Employee is scheduled to work six or more hours a day, he must be released from duty for a one half-hour meal period after five hours of work. The failure to provide the meal period requires an Employer to pay the Employee one hour of additional compensation.

2. Q: I provide Employees with two weeks of vacation per year. When an Employee leaves before her one year anniversary do I owe the Employee any vacation pay?

A: Yes. Vacation pay is earned on a pro rata basis. Once earned, it cannot be forfeited. For example, an Employee in your company who quits after six months of employment would be entitled to one week accrued vacation pay.

3. Q: My company loaned some money to an Employee who agreed to pay it back from his paycheck each week over a six month period. Shortly after the loan was made, the Employee quit his employment. He still owes the company and the company still owes him a paycheck and accrued vacation. Can my company apply the last paycheck and vacation pay to the Employee's debt?

A: No. While the Employee is legally obligated to repay the loan, an Employer has no greater standing to the Employee's paycheck than any other creditor of the Employee. Failure to pay an Employee his final paycheck and accrued vacation pay would result in up to 30 days of penalty wages pursuant to the California Labor Code.

4. Q: My retail associates are paid on a 100 percent commission basis, they make an excess of $160.00 per day on an eight hour shift. I want them to spend an hour a day off the selling floor to work in the stockroom. Do I have to pay them additional compensation for their time not on the sales floor?

A: No. Provided the Employee receives at least an amount equal to minimum wage for all hours worked, an Employer under these circumstances would not have to pay for the non-sales floor time.

5. Q: Does an Employer have to pay Employee's holiday pay?

A: It depends. There is no legal requirement to provide holiday pay to Employees. However, if the Employer has a policy providing Employees with holiday pay, it must continue with the benefit until it provides reasonable notice to Employees that it has discontinued the holiday pay practice.

WARNING: The State Labor Commissioner has stepped up its enforcement actions against Employers. The State Task Force inspected over 1,100 Employers in 2013. Over 75% of Employers were issued wage and hour and workplace safety citations. The penalties ranged from a few thousand dollars to over a million dollars. Employers must comply with California's strict employment regulations to avoid substantial penalties. We can perform an audit of your workplace practices.