In Camp v. Home Depot U.S.A., Inc., H049033, the California Court of Appeal for the Sixth District analyzed legal authority regarding an employer’s rounding practices as they pertain to timekeeping. Specifically, in Camp, the trial court granted summary judgment for the employer after determining the employer had a facially neutral rounding policy, which policy would not result in a failure to compensate employees for overtime. On appeal, the Sixth District reversed and remanded the trial court’s order granting summary judgment. In doing so, the court determined that “in relying on its quarter-hour time rounding policy, [the employer] fails to meet its burden to show that there is no triable issue of material fact regarding whether [the plaintiff] was paid for all the time he worked.” In effect, the Camp court overturned prior precedent, which approved facially neutral rounding policies that did not result in underpayment of employees for overtime.Continue Reading California Supreme Court Agrees To Review Case Involving California Timekeeping Rules
2024 California Ballot Initiative Could Repeal PAGA
In November 2024, California voters will have the opportunity to pass a ballot initiative to repeal the California Labor Code’s (Labor Code) Private Attorneys General Act of 2004, Cal. Lab. Code § 2698, et seq. (PAGA). PAGA allows an “aggrieved employee” to sue their employer on behalf of themself and other current and former employees to recover civil penalties for Labor Code violations (assuming the aggrieved employee follows the preliminary perquisites to filing the lawsuit). Prior to PAGA, only the California government could recover such civil penalties through enforcement actions brought by the California Labor and Workforce Development Agency (LWDA). Accordingly, in PAGA actions, a plaintiff who initiates an action serves as an “agent” or “proxy” of the California government. If an aggrieved employee recovers civil penalties, the aggrieved employees receive 25% of the recovery, with 75% of the penalties going to the state.
The ballot initiative, termed the California Fair Pay and Employer Accountability Act (FPEAA), seeks to eliminate an individual employee’s ability to initiate private actions to obtain civil penalties for purported violations of the Labor Code. Instead, the FPEAA requires employees to report purported Labor Code violations to the Division of Labor Standards Enforcement (DLSE) to obtain the civil penalties they currently seek under PAGA.
The FPEAA aims to impose various other changes, such as allowing employees to recover 100% of the penalties and eliminating the recovery of attorneys’ fees.
Given the potential changes, California employers should monitor the results of the 2024 ballot initiative.
Coronel v. Pinnacle Agriculture Distribution, Inc.
The California Supreme Court denied review of an appellate court judgment in favor of Simplot in a case called Coronel v. Pinnacle Agriculture Distribution, Inc. (“Coronel”). The California Fourth District Court of Appeal held, in an unpublished opinion, that a judgment in a prior class action alleging unpaid wages and inaccurate pay records barred a subsequent putative class action for unpaid wages and inaccurate pay records as a result of a release in the prior class action, even though plaintiff argued the subsequent class action encompassed claims broader than the settlement agreement and judgment in the prior class action.Continue Reading <em>Coronel v. Pinnacle Agriculture Distribution, Inc.</em>
Day-Rate Rules Result in Overtime Pay for Exempt Highly Compensated Employee
The U.S. Supreme Court recently ruled in Helix Energy Solutions Group v. Hewitt that a daily-rate worker who earned over $200,000 annually was not exempt from the Fair Labor Standards Act’s overtime requirements. In an opinion authored by Justice Elena Kagan, the Court held that compensation based on a daily rate did not satisfy the “salary basis test,” which is required for an employee to be exempt from overtime compensation. The decision, while specific to day-rate compensation, also applies to exempt employees paid an hourly or shift rate.
Further discussion of the Court’s decision and its implications for employers and employees is found here.
San Francisco Military Leave Pay Protection Act Requires Employers To Pay Employees While on Military Duty
Effective February 19, 2023, San Francisco employers with 100 or more employees worldwide will be required to pay employees who are military reservists and who are called for military duty the difference between their military salary and their civil salary as employees.Continue Reading San Francisco Military Leave Pay Protection Act Requires Employers To Pay Employees While on Military Duty
New Minimum Wage Laws in Washington State Effective January 1
Multiple new laws took effect in Washington at the beginning of the year, including several that increased the minimum wage in various locations across the state. Further details can be found here. With the start of the new year, employers should check to ensure that all nonexempt employees earn at least the minimum wage. This is particularly true for Washington employers with employees in multiple cities, given that the minimum wage in any given location may vary. This is also a good time to review overtime policies to ensure that employees are accurately characterized as exempt or nonexempt and are paid accordingly. Finally, Washington employers should review workers’ noncompete agreements to ensure that workers who are subject to such agreements meet the relevant salary thresholds.
California Civil Rights Department Updates FAQs on New California Pay Transparency Law
California’s Senate Bill 1162, a pay transparency law aimed at identifying pay disparities based on gender, ethnicity, and race, went into effect on January 1, 2023. Last week, the California Civil Rights Department (CRD), the state agency tasked with enforcing California’s civil rights laws, updated their Frequently Asked Questions (FAQ) to reflect the resulting changes to the state’s pay data reporting requirements.Continue Reading California Civil Rights Department Updates FAQs on New California Pay Transparency Law
City of Los Angeles COVID-19 Supplemental Paid Sick Leave Is Ending
During the COVID-19 pandemic, California and several local jurisdictions implemented COVID-19 sick leave laws. Many of these laws are now expiring. California’s state COVID-19 supplemental paid sick leave expired on December 31, 2022 and Governor Newsom announced that the COVID-19 state of emergency will end on February 28, 2023.Continue Reading City of Los Angeles COVID-19 Supplemental Paid Sick Leave Is Ending
Illinois Moves Toward Paid Leave for Any Reason
The Illinois legislature, on January 10, 2023, passed the Paid Leave for All Workers Act (PLFAW), which Governor Pritzker announced he will sign into law. Should the bill be enacted, Illinois would become the third state (after Maine and Nevada) to require private employers to provide employees with earned paid leave to use for any reason. A further description of the PLFAW can be found here. Perkins Coie will continue to monitor these legislative developments and provide additional guidance if/when the law is enacted. In the meantime, employers should begin to prepare for this likely change to the Illinois employment landscape.
City of Mountain View, California Enacts Wage Theft Ordinance
The city council of Mountain View, California, adopted Chapter 42 Article IV of the Mountain View City Code on September 13, 2022, establishing, in part, the Wage Theft Ordinance (the Ordinance) effective January 1, 2023.
The Ordinance applies to all employers who are required to have a City of Mountain View business license. Mountain View employers are required to complete a Wage Theft Affidavit at the time the employer applies for a business license and when the employer submits business license renewals to the tax administrator.
The City of Mountain View provides a model Wage Theft Affidavit. As explained in the model affidavit, the employer must affirm either that (1) the employer has not been found in violation of any federal, state, or local wage-and-hour laws or that (2) the employer is in compliance with or has fully satisfied any final judgment, order, or administrative decision issued against the business operator for violation of applicable federal, state, or local wage-and-hour laws.
The City of Mountain View encourages employers with recent business license renewals to submit the Wage Theft Affidavit no later than January 15, 2023. An employer’s failure to submit a Wage Theft Affidavit, or submission of a false affidavit, may subject an employer to administrative citations, fines, and penalties.
Companies with operations in Mountain View, California should closely review the Ordinance. Employers with questions regarding the new ordinance should contact experienced counsel.