Compliance Headaches for California Employers

Greetings once again from the road. 

Today, we finished our seminars in San Jose. The usual suspects, classifying employees, meal and rest breaks and final pay, continue to create compliance headaches for California employers.

Tomorrow, we conclude our two-week road trip with HR 201: Labor Law Update in Emeryville, where we will continue talking about these pesky topics.*

Our Employment Law Tip of the Day: All nonexempt employees must take a 30 minute, duty-free meal break within 4 hours and 59 minutes of that employee’s shift.

We've enjoyed the chance to meet you all in person.

Erika Frank and Susan Kemp

*CalChamber members get 20 percent off all compliance products, including seminars. Not a CalChamber member? Test-drive HRCalifornia with a 15-day Free Trial.

CA Supreme Court Says Three Year Statute of Limitations for Penalties for Unpaid Final Wages

When an employee is quits or is terminated, California law requires the employer pay the individual his or her final wages on time. Labor Code Section 203 states that, if an employer willfully fails to timely pay final wages, “the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid or until an action therefor is commenced; but the wages shall not continue for more than 30 days.”

The issue of whether a one year or three year statute of limitations applies to actions to recover penalties under Section 203 is at the heart of a recent Supreme Court Case. A lower court found that a one year statute of limitations applies to actions brought to recover such penalties, but on November 18th, the California Supreme Court ruled that "Labor Code Section 203(b) contains a single, three-year limitations period governing all actions for section 203 penalties irrespective of whether an employee’s claim for penalties is accompanied by a claim for unpaid final wages."

So, even when an employee seeks to recover only penalties under Section 203, a three year statute of limitations applies.

Read the full opinion online. CalChamber Members can find out more about California final paycheck requirements at HRCalifornia.

OSHA Provides Crowd-Control Workplace Safety Tips

Last holiday season ended tragically for a store employee who died when a mob of shoppers rushed through the doors of a large retail store after Thanksgiving Day for a "Black Friday" sales event. In response to that and other crowd-related worker injuries, OSHA has issued a fact sheet for employers on how to keep their workers safe during high-traffic sales events.

The fact sheet details, among other things, recommendations for pre-event setup, security measures and emergency situation management. Visit HRCalifornia for more information on safety and health considerations in the workplace.

Severance and Release of Claims Documents - EEOC releases guidance

The federal Equal Employment Opportunity Commission has issued guidance relating to the use of severance agreements or agreements from former employees that they release all known and unknown claims agains the employer in exchange for some form of consideration - usually money.

According to the EEOC: Employee reductions and terminations have been an unfortunate result of the current economic downturn.  Even in good economic times, however, businesses of every size carefully assess their operational structures and may sometimes decide to reduce their workforce.  Often, employers terminate older employees who are eligible for retirement, or nearly so, because they generally have been with the company the longest and are paid the highest salaries.  Other employers evaluate individual employees on criteria such as performance or experience, or decide to lay off all employees in a particular position, division, or department. An employer’s decision to terminate or lay off certain employees, while retaining others, may lead discharged workers to believe that they were discriminated against based on their age, race, sex, national origin, religion, or disability.

To minimize the risk of potential litigation, many employers offer departing employees money or benefits in exchange for a release (or “waiver”) of liability for all claims connected with the employment relationship, including discrimination claims under the civil rights laws enforced by the Equal Employment Opportunity Commission (EEOC) -- the Age Discrimination in Employment Act (ADEA), Title VII, the Americans with Disabilities Act (ADA), and the Equal Pay Act (EPA). While it is common for senior-level executives to negotiate severance provisions when initially hired, other employees typically are offered severance agreements and asked to sign a waiver at the time of termination. When presented with a severance agreement, many employees wonder: Is this legal? Should I sign it?

Read the guidance on the EEOC Web site. Remember - always consult with legal counsel before having a departing employee sign such a document. These documents should never be "boiler plate." Make sure you do not rely on a document downloaded from the Internet - it may be from another state or contain illegal provisions.

Furloughs, Pay cuts - avoid Wage and Hour Danger!

During these economic times, many companies are exploring ways to cut costs while still maintaining their workforce. Furlough days - or forced days off/office closure - is one option California employers are exploring. However, employment and labor law puts strict restriction on the ability of California employers to cut exempt employee pay. 

If you attended our free Web seminar this morning, we talked about pay deductions from exempt salaries. If you are a CalChamber member, you will be able to listen to this Web seminar on demand soon (stay tuned).

If you did not, or you want more information, you should attend our Web seminar on August 20 for a more detailed analysis of exempt employee pay and benefit accruals.

In the meantime, CalChamber members can read our Flexible Alternatives to Layoffs article.