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HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM EMPLOYMENT/ IMMIGRATION SEMINAR James M. Peterson, Esq. Sam G. Sherman, Esq. Higgs, Fletcher & Mack LLP 401.

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Presentation on theme: "HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM EMPLOYMENT/ IMMIGRATION SEMINAR James M. Peterson, Esq. Sam G. Sherman, Esq. Higgs, Fletcher & Mack LLP 401."— Presentation transcript:

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2 HIGGS, FLETCHER & MACK LLP EMPLOYMENT/ IMMIGRATION SEMINAR James M. Peterson, Esq. Sam G. Sherman, Esq. Higgs, Fletcher & Mack LLP 401 West A Street, Suite 2600 San Diego, CA Sam G. Sherman, Esq. Higgs, Fletcher & Mack LLP 401 West A Street, Suite 2600 San Diego, CA Blog: Blog:

3 HIGGS, FLETCHER & MACK LLP EXEMPT EMPLOYEES EXEMPT FROM ALL PROVISIONS EXEMPT FROM ALL PROVISIONS OUTSIDE SALESPERSONS OUTSIDE SALESPERSONS GOVERNMENT EMPLOYEES GOVERNMENT EMPLOYEES MEMBERS OF IMMEDIATE FAMILY MEMBERS OF IMMEDIATE FAMILY MINIMUM WAGE, OVERTIME, REST AND MEAL PERIODS MINIMUM WAGE, OVERTIME, REST AND MEAL PERIODS ADMINISTRATIVE, EXECUTIVE AND PROFESSIONALS ADMINISTRATIVE, EXECUTIVE AND PROFESSIONALS

4 HIGGS, FLETCHER & MACK LLP EXECUTIVE EXEMPTION Executive Exemption. A person employed in an executive capacity means any employee: Executive Exemption. A person employed in an executive capacity means any employee: (a) Whose duties and responsibilities involve the management of the enterprise in which he/she is employed or of a customarily recognized department or subdivision thereof; and (b) Who customarily and regularly directs the work of two or more other employees therein; and (c) Who has the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring or firing and as to the advancement and promotion or any other change of status of other employees will be given particular weight; and

5 HIGGS, FLETCHER & MACK LLP EXECUTIVE EXEMPTION (CONTINUED) (d) Who customarily and regularly exercises discretion and independent judgment; and (d) Who customarily and regularly exercises discretion and independent judgment; and (e) Who is primarily engaged in duties which meet the test of the exemption. (e) Who is primarily engaged in duties which meet the test of the exemption. (f) Such an employee must also earn a monthly salary equivalent to no less than two (2) times the state minimum wage for full-time employment. Full-time employment is defined in Labor Code Section 515(c) as 40 hours per week. (f) Such an employee must also earn a monthly salary equivalent to no less than two (2) times the state minimum wage for full-time employment. Full-time employment is defined in Labor Code Section 515(c) as 40 hours per week.

6 HIGGS, FLETCHER & MACK LLP Administrative Exemption Administrative Exemption. A person employed in an administrative capacity means any employee: (a) Whose duties and responsibilities involve either: (i) The performance of office or non-manual work directly related to management policies or general business operations of his/her employer or his/her employer’s customers; or (ii) The performance of functions in the administration of a school system, or educational establishment or institution, or of a department or subdivision thereof, in work directly related to the academic instruction or training carried on therein; and

7 HIGGS, FLETCHER & MACK LLP ADMINISTRATIVE EXEMPTION (CONTINUED) (b) Who regularly and directly assists a proprietor, or an employee employed in a bona fide executive or administrative capacity; or (c) Who performs under only general supervision, work along specialized or technical lines requiring special training, experience, or knowledge; or (d) Who executes under only general supervision special assignments and tasks

8 HIGGS, FLETCHER & MACK LLP Professional Exemption Professional Exemption. A person employed in a professional capacity means any employee who meets all of the following requirements: (a) Who is licensed or certified by the State of California and is primarily engaged in the practice of one of the following recognized professions: law, medicine, dentistry, optometry, architecture, engineering, teaching, or accounting; or (b) Who is primarily engaged in an occupation commonly recognized as a learned or artistic profession.

9 HIGGS, FLETCHER & MACK LLP Professional Exemption (CONTINUED) For the purposes of this subsection, “learned or artistic profession” means an employee who is primarily engaged in the performance of: (i) Work requiring knowledge of an advanced type in a field or science or learning customarily acquired by a prolonged course of specialized intellectual instruction and study, as distinguished from a general academic education and from an apprenticeship, and from training in the performance of routine mental, manual, or physical processes, or work that is an essential part of or necessarily incident to any of the above work; or (i) Work requiring knowledge of an advanced type in a field or science or learning customarily acquired by a prolonged course of specialized intellectual instruction and study, as distinguished from a general academic education and from an apprenticeship, and from training in the performance of routine mental, manual, or physical processes, or work that is an essential part of or necessarily incident to any of the above work; or (ii) Work that is original and creative in character in a recognized field of artistic endeavor (as opposed to work which can be produced by a person endowed with general manual or intellectual ability and training), and the result of which depends primarily on the invention, imagination, or talent of the employee or work that is an essential part of or necessarily incident to any of the above work; and (iii) Whose work is predominantly intellectual and varied in character (as opposed to routine mental, manual, mechanical,or physical work) and is of such character that the output produced or the result accomplished cannot be standardized in relation to a given period of time.

10 HIGGS, FLETCHER & MACK LLP EXEMPT STATUS “PRIMARILY ENGAGED IN” THE DUTIES WHICH MEET THE TEST OF THE EXEMPTION “PRIMARILY ENGAGED IN” THE DUTIES WHICH MEET THE TEST OF THE EXEMPTION MORE THAN HALF OF THEIR TIME IN EXEMPT WORK—”QUANTITATIVE TEST” MORE THAN HALF OF THEIR TIME IN EXEMPT WORK—”QUANTITATIVE TEST” CONTRAST WITH FLSA—”PRIMARY DUTY”— ”QUALITATIVE TEST” CONTRAST WITH FLSA—”PRIMARY DUTY”— ”QUALITATIVE TEST”

11 HIGGS, FLETCHER & MACK LLP EXEMPT STATUS ACTIVITIES TO BE CONSIDERED EXEMPT INCLUDE WORK “DIRECTLY AND CLOSELY RELATED” TO EXEMPT WORK AND WORK PROPERLY VIEWED AS A MEANS FOR CARRYING OUT EXEMPT FUNCTIONS ACTIVITIES TO BE CONSIDERED EXEMPT INCLUDE WORK “DIRECTLY AND CLOSELY RELATED” TO EXEMPT WORK AND WORK PROPERLY VIEWED AS A MEANS FOR CARRYING OUT EXEMPT FUNCTIONS GUIDANCE IN 29 C.F.R (MANAGERIAL); 208(ADMINISTRATIVE); 308(PROFESSIONAL) GUIDANCE IN 29 C.F.R (MANAGERIAL); 208(ADMINISTRATIVE); 308(PROFESSIONAL) EXAMPLES: EXAMPLES: TIMEKEEPER VS. PAYROLL CLERK TIMEKEEPER VS. PAYROLL CLERK SALES RECORDS FOR SUPERVISION VS. PRODUCTION RECORDS FOR THOSE NOT UNDER CONTROL OR SUPERVISION SALES RECORDS FOR SUPERVISION VS. PRODUCTION RECORDS FOR THOSE NOT UNDER CONTROL OR SUPERVISION DISTRIBUTION OF MATERIALS OR MERCHANDISE AND SUPPLIES VS. RETAIL ESTABLISHMENT WHERE TASKS PERFORMED BY NON-EXEMPT WORKERS DISTRIBUTION OF MATERIALS OR MERCHANDISE AND SUPPLIES VS. RETAIL ESTABLISHMENT WHERE TASKS PERFORMED BY NON-EXEMPT WORKERS SETUP WORK SETUP WORK

12 HIGGS, FLETCHER & MACK LLP EXEMPT STATUS OCCASSIONAL TASKS OCCASSIONAL TASKS IWC DOES NOT INTEND TASKS TO BE INCLUDED IN THE CALCULATION OF EXEMPT WORK IWC DOES NOT INTEND TASKS TO BE INCLUDED IN THE CALCULATION OF EXEMPT WORK NON-EXEMPT WORK PERFORMED BY AN EXEMPT MANAGER ON AN OCCASSIONAL BASIS MAY NOT BE COUNTED TOWARD THE 50% REQUIREMENT NON-EXEMPT WORK PERFORMED BY AN EXEMPT MANAGER ON AN OCCASSIONAL BASIS MAY NOT BE COUNTED TOWARD THE 50% REQUIREMENT

13 HIGGS, FLETCHER & MACK LLP EXEMPT STATUS EXERCISE OF DISCRETION AND INDEPENDENT JUDGMENT EXERCISE OF DISCRETION AND INDEPENDENT JUDGMENT COMPARISON AND EVALUATION OF POSSIBLE COURSES OF CONDUCT AND ACTING OR MAKING A DECISION AFTER THE VARIOUS POSSIBILITIES HAVE BEEN CONSIDERED 29 C.F.R. § COMPARISON AND EVALUATION OF POSSIBLE COURSES OF CONDUCT AND ACTING OR MAKING A DECISION AFTER THE VARIOUS POSSIBILITIES HAVE BEEN CONSIDERED 29 C.F.R. § AUTHORITY OR POWER TO MAKE AN INDEPENDENT CHOICE, FREEE FROM IMMEDIATE DIRECTION OR SUPERVISION AND WITH RESPECT TO MATTERS OF SIGNIFICANCE AUTHORITY OR POWER TO MAKE AN INDEPENDENT CHOICE, FREEE FROM IMMEDIATE DIRECTION OR SUPERVISION AND WITH RESPECT TO MATTERS OF SIGNIFICANCE

14 HIGGS, FLETCHER & MACK LLP EXEMPT STATUS REALISTIC EXPECTATIONS REALISTIC EXPECTATIONS WORK ACTUALLY PERFORMED MUST BE EXAMINED AND THE AMOUNT OF TIME SPENT ON EXEMPT WORK TOGETHER WITH THE EMPLOYER’S REALISTIC EXPECTATIONS AND THE REALISTIC REQUIREMENTS OF THE JOB MUST BE CONSIDERED WORK ACTUALLY PERFORMED MUST BE EXAMINED AND THE AMOUNT OF TIME SPENT ON EXEMPT WORK TOGETHER WITH THE EMPLOYER’S REALISTIC EXPECTATIONS AND THE REALISTIC REQUIREMENTS OF THE JOB MUST BE CONSIDERED

15 HIGGS, FLETCHER & MACK LLP EXEMPT STATUS SALARY REQUIREMENTS SALARY REQUIREMENTS SALARY EQUILAVENT TO TWO TIMES THE STATE MINIMUM WAGE ($7.50) OR $2600 PER MONTH. SALARY EQUILAVENT TO TWO TIMES THE STATE MINIMUM WAGE ($7.50) OR $2600 PER MONTH. INCREASES TO $8.00 PER HOUR 1/1/08 OR ABOUT $2775 PER MONTH INCREASES TO $8.00 PER HOUR 1/1/08 OR ABOUT $2775 PER MONTH

16 HIGGS, FLETCHER & MACK LLP SALES PERSONS OUTSIDE SALESPERSON OUTSIDE SALESPERSON “Outside salesperson” means any person, 18 years of age or over, who customarily and regularly works more than half the working time away from the employer’s place of business selling tangible or intangible items or obtaining orders or contracts for products, services or use of facilities. “Outside salesperson” means any person, 18 years of age or over, who customarily and regularly works more than half the working time away from the employer’s place of business selling tangible or intangible items or obtaining orders or contracts for products, services or use of facilities. EXEMPT FROM WAGE ORDERS EXEMPT FROM WAGE ORDERS

17 HIGGS, FLETCHER & MACK LLP SALES PERSONS COMMISIONED SALES PERSONS COMMISIONED SALES PERSONS EXEMPT FROM OVERTIME REQUIREMENTS EXEMPT FROM OVERTIME REQUIREMENTS EARNINGS MUST EXCEED ONE AND ONE- HALF MINIMUM WAGE, IF MORE THAN HALF OF THE EMPLOYEE’S COMPENSATION REPRESENTS COMMISSIONS EARNINGS MUST EXCEED ONE AND ONE- HALF MINIMUM WAGE, IF MORE THAN HALF OF THE EMPLOYEE’S COMPENSATION REPRESENTS COMMISSIONS

18 HIGGS, FLETCHER & MACK LLP COMMISSIONS In order to comply with the requirements of the exemption for each workweek the earnings of the employee, whether actual commissions or a guaranteed draw for the workweek against commissions to be earned within such work week, must exceed 1.5 times the minimum wage for each hour worked during the pay period. In order to comply with the requirements of the exemption for each workweek the earnings of the employee, whether actual commissions or a guaranteed draw for the workweek against commissions to be earned within such work week, must exceed 1.5 times the minimum wage for each hour worked during the pay period.

19 HIGGS, FLETCHER & MACK LLP COMMISSIONS THE 50% OF EARNINGS FROM COMMISSIONS RULE, MUST ALSO BE SATISFIED IN EACH WORKWEEK. THE 50% OF EARNINGS FROM COMMISSIONS RULE, MUST ALSO BE SATISFIED IN EACH WORKWEEK. THE ACTUAL DETERMINATION OF COMPLIANCE CAN BE DEFERRED UNTIL THE RECONCILIATION DATE FOLLOWING THE END OF THE SECOND PAY PERIOD. THE ACTUAL DETERMINATION OF COMPLIANCE CAN BE DEFERRED UNTIL THE RECONCILIATION DATE FOLLOWING THE END OF THE SECOND PAY PERIOD. OVERTIME WILL BE DUE FOR ANY WEEK IN WHICH THE SECOND COMPONENT IS NOT MET. TO TEST FOR WHETHER THE COMPENSATION ARRANGEMENT IS A BONA FIDE COMMISSION PLAN, CALIFORNIA LAW ALSO USES A PERIOD OF AT LEAST ONE MONTH. OVERTIME WILL BE DUE FOR ANY WEEK IN WHICH THE SECOND COMPONENT IS NOT MET. TO TEST FOR WHETHER THE COMPENSATION ARRANGEMENT IS A BONA FIDE COMMISSION PLAN, CALIFORNIA LAW ALSO USES A PERIOD OF AT LEAST ONE MONTH.

20 HIGGS, FLETCHER & MACK LLP EXEMPT EMPLOYEES PENALTIES AND REMEDIES FOR MISCLASSFICATION PENALTIES AND REMEDIES FOR MISCLASSFICATION ADMINISTRATIVE ENFORCENT BY THE DLSE ADMINISTRATIVE ENFORCENT BY THE DLSE LABOR COMMISSIONER OR BERMAN HEARINGS LABOR COMMISSIONER OR BERMAN HEARINGS JUDICIAL ENFORCEMENT JUDICIAL ENFORCEMENT INTEREST, WAITING TIME PENALTIES, ATTORNEYS FEES, PENALTIES INTEREST, WAITING TIME PENALTIES, ATTORNEYS FEES, PENALTIES

21 HIGGS, FLETCHER & MACK LLP STATUTE OF LIMITATIONS STATUTORY CLAIMS STATUTORY CLAIMS 3 YEARS—STATUTORY CLAIM FOR WAGES 3 YEARS—STATUTORY CLAIM FOR WAGES 1 YEAR-PENALTIES 1 YEAR-PENALTIES 4 YEARS-UNFAIR COMPETITION 4 YEARS-UNFAIR COMPETITION

22 HIGGS, FLETCHER & MACK LLP AVOIDING CLAIMS REVIEW THE POSITION REVIEW THE POSITION USE OF JOB DESCRIPTIONS USE OF JOB DESCRIPTIONS UPDATE TO REFLECT ACTUAL WORK UPDATE TO REFLECT ACTUAL WORK MONITOR ACTIVITIES AND TRAIN REGIONAL MANAGERS MONITOR ACTIVITIES AND TRAIN REGIONAL MANAGERS

23 HIGGS, FLETCHER & MACK LLP AUDITING STATUS SELF EVALUATION SELF EVALUATION JOB SHADOWING JOB SHADOWING EVALUATIONS EVALUATIONS POLICY MANUALS OR OPERATIONS MANUALS POLICY MANUALS OR OPERATIONS MANUALS INTERVIEW OF CO-WORKERS OR SUBORDINATES INTERVIEW OF CO-WORKERS OR SUBORDINATES

24 Reductions in Force CA WARN ACT CA WARN ACT CA Labor Code Section 1400 et. seq. CA Labor Code Section 1400 et. seq. 75 or more employees within the proceeding 12 months 75 or more employees within the proceeding 12 months Layoff of 50 or more employees during any 30 day period Layoff of 50 or more employees during any 30 day period 60 days notice to employees and EDD 60 days notice to employees and EDD Back pay, Civil Penalty, Civil Action Back pay, Civil Penalty, Civil Action HIGGS, FLETCHER & MACK LLP

25 2011 EMPLOYMENT UPDATE LEGISLATIVE UPDATE LEGISLATIVE UPDATE NLRB Posting Requirement NLRB Posting Requirement NLRB First Issues Final Rule Requiring Posting NLRB First Issues Final Rule Requiring Posting Must inform workers of right to organize a union Must inform workers of right to organize a union Join or assist a union Join or assist a union Bargain collectively Bargain collectively Discuss your wages or terms of employment with other employees or union Discuss your wages or terms of employment with other employees or union Take action with other employees to improve conditions Take action with other employees to improve conditions Strike and picket Strike and picket HIGGS, FLETCHER & MACK LLP

26 2011 EMPLOYMENT UPDATE NLRB POSTING NLRB POSTING Originally contained November 14, 2011 effective date Originally contained November 14, 2011 effective date Lawsuit by manufacturing group challenging NLRB’s authority Lawsuit by manufacturing group challenging NLRB’s authority October 5, 2011, NLRB delays posting until January 31, 2011 October 5, 2011, NLRB delays posting until January 31, 2011 HIGGS, FLETCHER & MACK LLP

27 2011 EMPLOYMENT UPDATE SB 459 SB 459 Tougher Sanctions for Willful Misclassification of Employees as Independent Contractors Tougher Sanctions for Willful Misclassification of Employees as Independent Contractors Allows Labor and Workforce Development Agency (LWDA) to assess civil penalties for violations Allows Labor and Workforce Development Agency (LWDA) to assess civil penalties for violations Allows LWDA to notify CSLB in event licensed contractor violates law Allows LWDA to notify CSLB in event licensed contractor violates law Allows Labor Commissioner to assess civil and liquidated damages against violations Allows Labor Commissioner to assess civil and liquidated damages against violations Joint and Several Liability for Conspirators Joint and Several Liability for Conspirators HIGGS, FLETCHER & MACK LLP

28 2011 EMPLOYMENT UPDATE AB 22 AB 22 Prohibits Reliance on Credit Reports in hiring Prohibits Reliance on Credit Reports in hiring Exceptions: Exceptions: Department of Justice Department of Justice Managerial positions Managerial positions A sworn peace officer A sworn peace officer Position involving regular access to people’s bank records Position involving regular access to people’s bank records HIGGS, FLETCHER & MACK LLP

29 2011 EMPLOYMENT UPDATE AB 469 AB 469 Notice of Pay Details Notice of Pay Details Pay rate and basis (hourly, Salary, etc…) Pay rate and basis (hourly, Salary, etc…) Allowances claimed as part of minimum wage Allowances claimed as part of minimum wage Regular payday Regular payday Name of the employer (including DBAs) Name of the employer (including DBAs) Employers physical address and phone number Employers physical address and phone number Worker’s compensation carrier information Worker’s compensation carrier information HIGGS, FLETCHER & MACK LLP

30 2011 EMPLOYMENT UPDATE AB 1396 AB 1396 Requires written contracts for commissioned employees Requires written contracts for commissioned employees Former law applied only to foreign employers Former law applied only to foreign employers AB 1396 extends requirement to California employers AB 1396 extends requirement to California employers January 1, 2013 deadline January 1, 2013 deadline HIGGS, FLETCHER & MACK LLP

31 2011 EMPLOYMENT UPDATE SB 299 SB 299 Health benefits for 4 months during PDL Health benefits for 4 months during PDL Law has long required employers to provide 4 months of disability leave for pregnancy Law has long required employers to provide 4 months of disability leave for pregnancy Prior to SB 299, only had to provide same benefits given to other disabled employees Prior to SB 299, only had to provide same benefits given to other disabled employees Now, must give same benefits given to non- disabled employees (can require contributions) Now, must give same benefits given to non- disabled employees (can require contributions) Can require premium reimbursement if employee fails to return to work Can require premium reimbursement if employee fails to return to work HIGGS, FLETCHER & MACK LLP

32 2011 EMPLOYMENT UPDATE New Case Law New Case Law Brennan v. Townsend & O'Leary Brennan v. Townsend & O'Leary Brennan v. Townsend & O'Leary Brennan v. Townsend & O'Leary Hostile work environment and sexual harassment Hostile work environment and sexual harassment Off-color santas at Christmas parties Off-color santas at Christmas parties Plaintiff inadvertently obtained written by another employee referring to her as “big titted” and “mindless” Plaintiff inadvertently obtained written by another employee referring to her as “big titted” and “mindless” Plaintiff quit, claimed constructive discharge, and sued. Plaintiff quit, claimed constructive discharge, and sued. Jury found in her favor and awarded $250,000 Jury found in her favor and awarded $250,000 Judge threw out the verdict finding no evidence of severe and pervasive conduct Judge threw out the verdict finding no evidence of severe and pervasive conduct Appellate Court agreed Appellate Court agreed HIGGS, FLETCHER & MACK LLP

33 2011 EMPLOYMENT UPDATE Holmes v. Petrovich Holmes v. Petrovich Attorney-Client privilege Attorney-Client privilege Plaintiff claimed harassment and discrimination based on pregnancy Plaintiff claimed harassment and discrimination based on pregnancy Plaintiff ed her attorney using company e- mail system before claiming constructive discharge Plaintiff ed her attorney using company e- mail system before claiming constructive discharge Company found s and used them at trial. Company found s and used them at trial. HIGGS, FLETCHER & MACK LLP

34 2011 EMPLOYMENT UPDATE Holmes v. Petrovich Holmes v. Petrovich Court found s not privileged Court found s not privileged No expectation of privacy No expectation of privacy Signed employee handbook stating 1.) only for business purposes; 2.) employee messages could be monitored at any time; 3.) s were not private Signed employee handbook stating 1.) only for business purposes; 2.) employee messages could be monitored at any time; 3.) s were not private Not clear if court would rule the same in absence of policy Not clear if court would rule the same in absence of policy HIGGS, FLETCHER & MACK LLP

35 2011 EMPLOYMENT UPDATE Brinker Update Brinker Update Issue: Must employers provide meal periods or ensure they are taken Issue: Must employers provide meal periods or ensure they are taken Oral argument scheduled for November 8, 2011 Oral argument scheduled for November 8, 2011 Court, generally, has 90 days from oral argument to issue a ruling. Court, generally, has 90 days from oral argument to issue a ruling. HIGGS, FLETCHER & MACK LLP

36 2011 EMPLOYMENT UPDATE Brinker Update (Continued…) Brinker Update (Continued…) Hernandez v. Chipotle Mexican Grill, Tien v. Tenent healthcare Corp., & Flores v. Lamps Plus, Inc. Hernandez v. Chipotle Mexican Grill, Tien v. Tenent healthcare Corp., & Flores v. Lamps Plus, Inc. Court found employer must only provide breaks. Court found employer must only provide breaks. HIGGS, FLETCHER & MACK LLP

37 2011 EMPLOYMENT UPDATE Hofferica v. St. Mary Medical Center FMLA Retaliation Employee terminated after failing to return to work after taking FMLA leave Claimed she simply required a brief leave extension Defense prevailed on a motion to dismiss and Plaintiff appealed HIGGS, FLETCHER & MACK LLP

38 2011 EMPLOYMENT UPDATE Hofferica v. St. Mary Medical Center (Continued…) Court found Plaintiff stated a valid claim for FMLA Retaliation given the employer’s failure to return her calls Employer treated her differently based on her FMLA leave given it returned her calls before she took leave HIGGS, FLETCHER & MACK LLP

39 2011 EMPLOYMENT UPDATE Lu v. Hawaiian Gardens Casino, Inc. Lu v. Hawaiian Gardens Casino, Inc. Tip Pooling Tip Pooling Plaintiff served as card dealer in casino Plaintiff served as card dealer in casino Required to set aside 15-20% of tips Required to set aside 15-20% of tips Plaintiff brought class action Plaintiff brought class action Supreme Court granted review to determine if violations of Labor Code section 351 provides a private right of action Supreme Court granted review to determine if violations of Labor Code section 351 provides a private right of action HIGGS, FLETCHER & MACK LLP

40 2011 EMPLOYMENT UPDATE Lu v. Hawaiian Gardens Casino, Inc. (Continued…) Lu v. Hawaiian Gardens Casino, Inc. (Continued…) Section 351 prohibits employers from taking employees’ tips. Section 351 prohibits employers from taking employees’ tips. Statute must manifest an intent to create a private right of action Statute must manifest an intent to create a private right of action Two ways: 1.) Expressly states that a person is liable for a cause of action for violating the statute; or 2.) refer to a remedy or means of enforcing its substantive provisions. Two ways: 1.) Expressly states that a person is liable for a cause of action for violating the statute; or 2.) refer to a remedy or means of enforcing its substantive provisions. HIGGS, FLETCHER & MACK LLP

41 2011 EMPLOYMENT UPDATE Lu v. Hawaiian Gardens Casino, Inc. (Continued…) Lu v. Hawaiian Gardens Casino, Inc. (Continued…) Section 351 states that violators subject to misdemeanor and states that the Department of Industrial Relations “shall enforce the provisions of the article.” Section 351 states that violators subject to misdemeanor and states that the Department of Industrial Relations “shall enforce the provisions of the article.” Found this was inconsistent with legislative intent to create a private right of action. Found this was inconsistent with legislative intent to create a private right of action. HIGGS, FLETCHER & MACK LLP

42 2011 EMPLOYMENT UPDATE Futrell v. Payday, Inc. Futrell v. Payday, Inc. Payroll company as joint employer Payroll company as joint employer Employee sued employer and payroll processing company claiming they were joint employers liable for wage and hour violations Employee sued employer and payroll processing company claiming they were joint employers liable for wage and hour violations Payroll company 1.) did not hire/fire; 2.) control work; 3.) set wages; 4.) supervise work; or 5.) set schedule. Payroll company did 1.) complete timecards; 2.) complete employee information sheets; 3.) employment eligibility verifications; 4.) W-4 certificates. Payroll company 1.) did not hire/fire; 2.) control work; 3.) set wages; 4.) supervise work; or 5.) set schedule. Payroll company did 1.) complete timecards; 2.) complete employee information sheets; 3.) employment eligibility verifications; 4.) W-4 certificates. HIGGS, FLETCHER & MACK LLP

43 2011 EMPLOYMENT UPDATE Futrell v. Payday, Inc. (Continued…) Futrell v. Payday, Inc. (Continued…) Pay stubs identified the payroll company as the employer of record Pay stubs identified the payroll company as the employer of record Trial Court granted summary judgment in favor of payroll company Trial Court granted summary judgment in favor of payroll company Appellate Court affirmed Appellate Court affirmed Labor Code identifies employer as entity responsible for wages, hours, and working conditions. Processing of wages does not qualify Labor Code identifies employer as entity responsible for wages, hours, and working conditions. Processing of wages does not qualify HIGGS, FLETCHER & MACK LLP

44 2011 EMPLOYMENT UPDATE Thompson v. North Am. Stainless, LP Thompson v. North Am. Stainless, LP U.S. Supreme Court U.S. Supreme Court Plaintiff and fiancé employees of NAS. Plaintiff and fiancé employees of NAS. Fiancé files claim of sex discrimination with EEOC Fiancé files claim of sex discrimination with EEOC Three weeks later, NAS terminates Plaintiff. Three weeks later, NAS terminates Plaintiff. Plaintiff sues alleging retaliation. Plaintiff sues alleging retaliation. Trial court and Sixth Circuit dismissed claims finding that Title VII does not permit third-party relations claims Trial court and Sixth Circuit dismissed claims finding that Title VII does not permit third-party relations claims HIGGS, FLETCHER & MACK LLP

45 2011 EMPLOYMENT UPDATE Thompson v. North Am. Stainless, LP (Continued…) Thompson v. North Am. Stainless, LP (Continued…) Supreme Court reversed Sixth Circuit Supreme Court reversed Sixth Circuit The court found it is “obvious that a reasonable worker might be dissuaded from engaging in protected activity if she knew her fiancé would be fired.” The court found it is “obvious that a reasonable worker might be dissuaded from engaging in protected activity if she knew her fiancé would be fired.” HIGGS, FLETCHER & MACK LLP

46 2011 EMPLOYMENT UPDATE United Parcel Serv. v. Superior Court United Parcel Serv. v. Superior Court Premium payments for missed meal and rest breaks Premium payments for missed meal and rest breaks Labor Code section allows employee that misses a meal or rest period to receive one additional hour of pay as a premium payment. Labor Code section allows employee that misses a meal or rest period to receive one additional hour of pay as a premium payment. HIGGS, FLETCHER & MACK LLP

47 2011 EMPLOYMENT UPDATE Issue: One hour per day as penalty, or one hour per violation? Issue: One hour per day as penalty, or one hour per violation? Court found that employees get one hour of pay per violation Court found that employees get one hour of pay per violation Get two hours of pay per day if miss both a meal and rest break Get two hours of pay per day if miss both a meal and rest break HIGGS, FLETCHER & MACK LLP

48 2011 EMPLOYMENT UPDATE Dukes v. Wal-Mart Dukes v. Wal-Mart Plaintiffs claimed that policy allowing local discretion for employment decisions has disproportionate impact on female employees Plaintiffs claimed that policy allowing local discretion for employment decisions has disproportionate impact on female employees Trial court and Ninth Circuit certified class Trial court and Ninth Circuit certified class U.S. Supreme Court reversed, finding that commonality absent U.S. Supreme Court reversed, finding that commonality absent Requires significant proof that Wal-Mart operated under a general policy of discrimination Requires significant proof that Wal-Mart operated under a general policy of discrimination HIGGS, FLETCHER & MACK LLP

49 2011 EMPLOYMENT UPDATE Dukes v. Wal-Mart (Continued…) Dukes v. Wal-Mart (Continued…) Critical to finding: Critical to finding: Wal-Mart has anti-discrimination policy Wal-Mart has anti-discrimination policy Policy of allowing local discretion is a policy against discrimination Policy of allowing local discretion is a policy against discrimination Left to their own devices, most managers will select sex-neutral, performance-based criteria for hiring and promotion. Left to their own devices, most managers will select sex-neutral, performance-based criteria for hiring and promotion. Company’s size was critical to decision Company’s size was critical to decision HIGGS, FLETCHER & MACK LLP

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